GBP/USD PRICE ACTION DRIVEN BY THE US DOLLAR.

Sterling hits a multi-month low to struggle against a recovery of US dollar with GBPUSD going towards a potential break below 1.3000. Daily Forex Signals helpful in analysing the forex prices. When US President Trump appeared to handle back on some of his harder trade restrictions with China, it would be a boost Wednesday. 

           The US dollar immediately broke to the topside and is now making a new monthly high rate with further gains like the US continues to hike rates in the months ahead. With Brexit on the menu at the EU Summit sterling also face a couple of potentially tricky days ahead. Forex Trading Picks No resolution is expected but a further round of negative talk from the EU will increase fears of a no-deal Brexit which neither side really wants.

Sterling can collect some strength from some quarter, GBPUSD set to break below 1.3000. While the British Pound continues to perform well against the NZD and CAD, and only marginally underperforming against the EUR, GBPUSD is a victim of a strong USD complex. Client sentiment also shows that retail remains heavily long of the pair. 

November low (1.3040) is now the final level of support before the August low at 1.2774 comes into play.  Pointing lower, while the MACD band remains negative, but the RSI indicator is now in the oversold region.

WEEKLY FORCAST FOR GBP/USD WHICH SUFFERS TRADE WARS

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GBP/USD continued struggling with a hard time. Brexit, Carney influenced it. Now What’s next? The EU Summit on Brexit and final GDP are the center of attraction. Forex Singapore

A compromise had reached by the UK government, managed to overcome yet another vote in parliament on the Brexit bill, but this is not necessarily a good thing, as chances for a hard Brexit are still real. US President Trump rattled markets with yet another contemplation of slapping further tariffs on China. The pound was carried along to lower ground. Here are the key event for GBP/USD. 

• High Street Lending: On Tuesday, 8:30, The official mortgage figures leads over the measure of lending reflects around two-thirds of mortgages. In April, they reported a level of 38K, up from the previous month.
• CBI Realized Sales:  The Confederation of British Industry provided a positive surprise in May with an upbeat score of 11. Another small increase could be seen for June Tuesday, 10:00.

EU Summit:  Leaders of the European Union meet to discuss various topics and Brexit tops the agenda on Thursday and Friday. By this meeting, the EU and the UK were expected to reach agreements on the main topics of the Irish border and the Customs Union and it seems nothing will be achieved.  Daily Forex Signals  There is a high likelihood that can be kicked down the road to the next EU Summit in October, where everything will need to be discussed ahead of March 29th, 2019, Brexit day. The British Pound will likely remain pressured but a failure to agree on anything may weigh on broader markets as well. In additions, the EU Summit will likely include a discussion on the trade spat with the US.

• GfK Consumer Confidence: On the middle day of the week. The 2000 strong survey showed a slight improvement in consumer sentiment back in May, up to -7 points. The negative figure still reflects gloomily among consumers. 
• Final GDP: Friday, 8:30. The British economy suffered a significant slop down in the first quarter of the year. It grew by only 0.1% q/q and 1.2% y/y according to the first and second reads. The final release will likely repeat the same figures. The second quarter already looks more promising.
• Current Account: Friday, 8:30. Britain had a current account deficit of 18.4 billion pounds in the last quarter of 2017. A deficit is likely also for Q1 2018 and it may have widened.
• Net Lending to Individuals: On Friday, 8:30. More lending means more economic activity. Net lending stood at 5.7 billion pounds in April, better than had been expected. Another positive month is likely.
• M4 Money Supply:  In April Friday, 8:30. The amount of money in circulation grew by 0.2%, above expectations and after two months of drops. Another modest rise could be seen for May.
• Mortgage Approvals: Contrary to the High Street figure, the overall number of mortgages decreased to 62K in April Friday, 8:30.  Forex Trading Picks

GBP/USD Technical analysis: Pound/dollar fell below 1.3205, reaching new lows.

Technical lines from top to bottom:

1.3780 was a line of support in March and 1.3710 was the lowest point since early in the year.

Below, 1.3615 capped the pair in late 2017. 1.3470 was a swing high in early June.

The round number of 1.34 could provide further support. Further down, 1.33, which supported the pair in December.

1.3250 was a swing low in early June. 1.3205 was the low point in late May and 1.3080 served as support back in November 2017. The ultimate line is 1.3000.

Updated Technical Analysis For GBP/USD:

GBP/USD had been going with a hard time, the strength of the US dollar and as the UK government made compromises on the Brexit Bill. What’s next? Now the focus is on the BOE’s rate decision and the Mansion House speech by Mark Carney. Forex Singapore

A compromise had reached by the UK government with the pro-Remain rebels in order to secure a victory in Parliament over the amendments suggested by the House of Lords. This could lead to a softer Brexit, but other factors complicated the picture. GBP/USD fell sharply. UK inflation disappointed with 2.4% y/y.  When retail sales beat expectations, the jobs report was mixed with unimpressive salaries but a drop in jobless claims.  The Fed raised interest rates and signaled two additional moves in the US, The hawkish hike took time to materialize in markets and the greenback exploded only after American retail sales beat expectations. Here are the key events and GBP/USD Forecast after the Brexit battles, Carney carnage awaited. Daily Forex Signals

• Rightmove HPI: According to Rightmove, House prices increased by 0.8% on Sunday, April, showing some flexibility in a sector that struggled earlier in the year.

• CBI Industrial Order Expectations: On Wednesday, 10:10. Britain’s industry is suffering from hiccups as this measure of orders has shown. A drop of -3 was seen last time and bounce back to positive ground, 1 point, is on the cards this time.

• Public Sector Net Borrowing:  The British government borrowed a total of 6.2 billion pounds, within normal ranges on Thursday, 8:30. A small squeeze in public lending is likely now: 5.1 billion.

• UK rate decision: Thursday, 11:00. The Bank of England left the interest rate changing its intentions after data came out worse than expected unchanged in May. The BOE is expected to leave its policy once again in this meeting which does not include the publication of the Quarterly Inflation Report nor a press conference. At the same time, the Bank also publishes its meeting minutes and this will reveal the voting pattern. Back in May, two members voted to raise rates while seven, including Governor Carney, voted to leave it unchanged. The same pattern is on the cards now. The reaction may be relatively muted as the Governor speaks later in the day.

• Mark Carney talks: The Governor of the BOE will deliver an important speech at Mansion House on Thursday, 20:15. In the past, he used the occasion to signals changes in monetary policy, sometimes not in line with the thoughts of other members. Any twist may be treated with suspicion but could still move the pound. Carney speaks at a time when liquidity is low, so any surprise could have an outsized impact.

• BOE Quarterly Bulletin: The Quarterly Inflation Report on Friday, 11:00 is not as important as the Bank of England’s quarterly report. Nevertheless, an updated view on the economy may impact markets. It will be of interest to see if the BOE remains optimistic about a Spring recovery as we enter the Summer.
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GBP/USD Technical analysis: 

Pound/dollar plunged and closed below 1.33 and made an initial move to the upside, getting close to 1.3470 (mentioned last week).

Technical analysis from top to bottom:

since early in the year 1.3780 was a line of support in March and 1.3710 was the lowest point. 

Below, 1.3615 capped the pair in late 2017. 1.3470 was a swing high in early June.

The round number of 1.34 could provide further support. Further down, 1.33, which supported the pair in December, is still relevant.

1.3250 was a swing low in early June and 1.3205 was the low point in late May. 1.3080 served as support back in November 2017. The ultimate line is 1.3000. Forex Trading Picks

I remain bearish on GBP/USD, while hopes of a softer Brexit support the pound, the BOE is not close to raising rates, especially as trade issues loom. The US Dollar could gain further strength. 

ASD/ USD TRADING STRATEGY:

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AUD/USD TECHNICAL STRATEGY: NET SHORT AT 0.7547

1. Aussie Dollar resuming downtrend after breaking counter-trend support.

2. Push through May swing low opens the door to test below 0.74 mark.

3. Improved risk/reward setup sought to add to AUD/USD short position.

After breaking counter-trend support, guiding the upswing from the early May, the  Australian Dollar is unprotected to deeper losses against its US counterpart that rise now to looks confirmed as a correction within the context of a longer-term decline launched in late January.

            From the May 9, sellers are composed to challenge low at 0.7413, with a break down on a daily closing basis opening the door for a test of inflection point support stretching back to mid-June 2016 at 0.7335. Immediate resistance is in the 0.7585-0.7606 area.Forex Singapore

The short AUD/USD position activate at 0.7608 and subsequently scaled up near 0.7530 is still in play. Adding to exposure is tempting but the velocity of the latest down move has skewed risk/reward parameters against doing so. A bounce to establish a new swing high against which to set a stop-loss will be sought. Daily Forex Signals

 AUD/USD TRADING RESOURCES:

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Weekly Forecast USD/JPY June 4-8 – Let's Make Good Profit This Week

The U.S. dollar, Japanese yen (USD JPY) is a currency pairing and can be traded against each other.  The USD JPY is among the most traded currency pairs which fell to new lows level but reduced most of its losses in a week that saw fears about trade worries and a potential movement of  Italy leap. FOREX TRADING PICKS

ITALY TRADE WAR:

 Italy has prevented the risk of early elections but its new government is planning. The new government may still cause trouble for Europe. Here's how Italy gave strength to euro crisis fears and sparked a global stock...Daily Forex Signals even if most Italians still support the single currency. A new round of elections would have brought a stronger majority for the anti-establishment parties and would have been seen as a de-facto referendum on the euro-zone. 

Thus triggering a wide global crisis and the fear of Italy leaving the currency (euro-zone)which results from rising to the highest levels in many years. The crisis arises when the President rejected a Euroskeptic finance minister, Savona. As a compromise was reached this was finally avoided.

Before trade came the crisis encourages a sudden rise in the yen (the safe-haven currency). The US implemented tariffs on steel and aluminum on Canada, Mexico, and the EU. This creates global tensions and a growing fear of trade wars will result in weaker global growth. 

The US economy gained 223K jobs, better than expected as report updated. The wages increased by 0.3% and the annual pace ticked up to 2.7%. This helped the currency pair rise toward the end of the week. 

ISM Non-Manufacturing PMI, North Korea, and trade:

The outstanding figure on a relatively lightweight calendar is the ISM Non-Manufacturing PMI published on Tuesday. As the NFP is already out, the report will have its own space. An increase is expected. In addition to the lack of top-tier figures, there will be no Fed speeches as they are already in a blackout period ahead of the decision in the following week.

Preparations are also going on for the reinstated Trump-Kim Summit. Any ups and down can impact the safe-haven Japanese yen.

The G-7 came out against America’s behavior on trade, which has worsened with all the world. The new tariffs on steel and aluminum may be joined by tariffs on Chinese tech. Japan is not only a safe haven but also dependent on trade.

See all the main events in the Forex Weekly Outlook

USD/JPY Technical Analysis: 

112.20 supported the pair back in December. It is followed by 111.40 which capped the pair in mid-May

Further down, 110.50 was a swing high in February. The round number of 110 serves as a psychological level. 109.50 held the pair back in late April.

109 was a pivotal line within the range. 108.70 was a stepping stone on the way up. 108.10 was a low point in late May and serves as a support line.

Lower, we find 107.50 capped the pair in early April and is a strong line.

106.50 was a resistance line in mid-February. and then resistance in early March. 105.55 was the first swing low.

Forex Singapore