GBP/USD – British pound falls to 7-week low despite lukewarm US data

GBP/USD continues to slide, as the pair has lost ground in the Thursday session. In North American trade, the pair is trading at 1.2814, down 0.53% on the day. There are no British indicators on the schedule. In the U.S, durable goods reports were mixed, and unemployment claims moved higher. On Friday, the U.S releases two key indicators – Advance GDP and UoM Consumer Sentiment.

U.S durable goods reports for September were mixed. Core durable goods orders came in at 0.1% for a second straight month, missing the estimate of 0.5%. Durable goods orders dropped from 4.5% to 0.8%, but this was much better than the forecast of -1.3%. Unemployment claims rose to 215 thousand, a shade above the forecast of 214 thousand. Despite these tepid numbers, the U.S dollar is broadly higher on Thursday, and the struggling pound has fallen to its lowest level since the first week of September.

The safe-haven U.S dollar has attracted nervous investors, due to increasing geopolitical tensions. These include the U.S-China trade war, the uproar over the killing of a Saudi journalist in Turkey and tense relations between Moscow and Washington. There are headaches in Europe as well, with concerns over the Italian budget and the Brexit negotiations. The Brexit talks remain at an impasse, despite Prime Minister May declaring in Parliament earlier this week that the 95% of the issues between the EU and the UK have been resolved. Britain departs the EU at the end of March, and the uncertainty surrounding Brexit is likely to continue to weigh on the pound.

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GBP/USD Fundamentals

Thursday (October 25)

• 8:30 US Core Durable Goods Orders. Estimate 0.5%. Actual 0.1%
• 8:30 US Durable Goods Orders. Estimate -1.3%. Actual 0.8%
• 8:30 US Unemployment Claims. Estimate 214K. Actual 215K
• 10:00 US Pending Home Sales. Estimate -0.1%. Actual 0.5% 
• 10:30 US Natural Gas Storage. Estimate 47B. 58B
• 12:15 US FOMC Member Clarida Speaks
• 17:30 FOMC Member Mester Speaks

Friday (October 26)

• 8:30 US Advance GDP. Estimate 3.3%
• 8:30 US Advance GDP Price Index. Estimate 2.1%
• 10:00 US Revised UoM Consumer Sentiment. Estimate 98.9

*All release times are DST

*Key events are in bold

GBP/USD for Thursday, October 25, 2018

GBP/USD October 25 at 11:05 DST

Open: 1.2881 High: 1.2920 Low: 1.2810 Close: 1.2814

GBP/USD Technical

GBP/USD was flat in the Asian session. The pair posted considerable gains in European trade and has recorded small losses in North American trade

• 1.2852 is providing support
• 1.2966 is the next resistance line
• Current range: 1.2852 to 1.2966

Further levels in both directions:

• Below: 1.2852, 1.2723 and 1.2590
• Above: 1.2966, 1.3173, 1.3301 and 1.3447

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