GBP/USD – British pound under pressure after rough start to week

GBP/USD has dropped lower on Tuesday, after starting the week with considerable losses. Currently, GBP/USD is trading at 1.3062, down 0.27% on the day. There are no major events on the schedule. Today’s highlight is U.S. JOLTS Jobs Openings, which is expected to climb to 7.35 million. The U.K. will release BRC retail sales monitor, which is expected to gain 2.4% after two successive declines.

With Brexit extended until October, the focus is now on Theresa May – will she survive as Prime Minister? There are growing calls on May to set a resignation date, and that end-date could be hastened if she reaches a cross-party deal with the Labor party. There has been speculation that May is looking to enter a new customs union with Brussels, infuriating many of her Tory colleagues, who see such an arrangement has blocking the U.K. from pursuing an independent trade policy. Brexit talks between London and Brussels are set to resume, but the track record indicates that the parties will have a tough time closing the gaps in their positions.

On Sunday, U.S. President Donald Trump said that the U.S. would raise tariffs on $200 billion worth of Chinese goods as early as Friday, from 10% to 25%. Trump sounded nonchalant about the trade talks, saying that even if an agreement wasn’t reached, the U.S. would benefit from the new tariffs. On Monday, Chinese officials had said it would cancel the talks, but this turned out to be an empty threat. Chinese Vice Premier Liu He is scheduled to lead a Chinese delegation to Washington. Will the new U.S. tariffs be rescinded? Treasury Secretary Steve Munchin said that the tariffs could be cancelled when the talks resume.

Thunder from the land down under

Tariff Man has Risk Doubters Seeking Shelter

GBP/USD Fundamentals

Tuesday (May 7)

• 4:00 British MPC Member Cunliffe Speaks
• 10:00 US JOLTS Job Openings. Estimate 7.35M
• 11:35 US FOMC Member Quarles Speaks
• 12:30 British MPC Member Haldane Speaks
• 15:00 US Consumer Credit. Estimate 17.0B
• 19:01 British BRC Retail Sales Monitor. Estimate 2.4%

*All release times are DST

*Key events are in bold

GBP/USD for Tuesday, May 7, 2019

GBP/USD May 7 at 7:55 DST

Open: 1.3096 High: 1.3060 Low: 1.3080 Close: 1.3062

GBP/USD Technical

GBP/USD edged higher in the Asian session but has retracted in European trade and continues to lose ground

• 1.3070 is under pressure in support. It could break on Tuesday
• 1.3170 is the next resistance line
• Current range: 1.3070 to 1.3070

Further levels in both directions:

• Below: 1.3070, 1.3000, 1.2910 and 1.2841
• Above: 1.3170, 1.3217 and 1.3300

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