With Brexit inching closer every day and a no-deal Brexit becoming more likely, the British Pound has sold-off severely. Price action in the GBPUSD is now approaching a key support area with the lower band being the intra-day low of the post Brexit referendum results sell-off. Today’s UK employment data is expected to show solid employment gains as well as rising wages. Will this boost the British Pound off of strong support levels and allow for a short-covering rally in the GBPUSD? Follow the PaxForex Daily Fundamental Analysis and earn more pips per trade!
As the US Federal Reserve is now expected to slash interest rates further, inflation data will gain more importance. Fed officials have noted the absence of inflation as a reason adjust monetary policy. Some analysts start to call for interest rates to drop back down to 0.00% as the US-China trade war intensifies. The US Dollar is under mounting pressure which is likely to force a steep sell-off, should forex traders start preparing their accounts? Today’s CPI data is likely to confirm that inflation, for the time being, remains tame. Is now a good time to buy the GBPUSD? Today’s fundamental analysis will take a look at where price action may be headed next.
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Key Fundamental Factors for the GBPUSD
Here are the key factors to keep in mind today for British Pound trades:
UK Jobless Claims Change and Claimant Count Rate: The UK Jobless Claims Change for July is predicted at 32.0K and the Claimant Count Rate is predicted at 3.2%. Forex traders can compare this to the UK Jobless Claims Change for June which was reported at 38.0K and to the Claimant Count Rate which was reported at 3.2%.
UK Employment Change, ILO Unemployment Rate and Average Weekly Earnings: The UK Employment Change for the tri-monthly period ending in June is predicted at 65K and the ILO Unemployment Rate is predicted at 3.8%. Forex traders can compare this to the UK Employment Change for May which was reported at 28K and to the ILO Unemployment Rate which was reported at 3.8%. Average Weekly Earnings for the tri-monthly period ending in June are predicted to increase by 3.7% annualized and Average Weekly Earnings Excluding Bonuses are predicted to increase by 3.8% annualized. Forex traders can compare this to Average Weekly Earnings for May which increased by 3.4% and Average Weekly Earnings Excluding Bonuses which increased by 3.6%.
Here are the key factors to keep in mind today for US Dollar trades:
US NFIB Small Business Optimism Index: The US NFIB Small Business Optimism Index for July is predicted at 104.0. Forex traders can compare this to the NFIB Small Business Optimism Index for June which was reported at 103.3.
US CPI: The US CPI for July is predicted to increase by 0.3% monthly and by 1.7% annualized. Forex traders can compare this to the US CPI for June which increased by 0.1% monthly and by 1.6% annualized. The US Core CPI for July is predicted to increase by 0.2% monthly and by 2.1% annualized. Forex traders can compare this to the US Core CPI for June which increased by 0.3% monthly by 2.1% annualized.
Should price action for the GBPUSD remain inside the or breakout above the 1.1985 to 1.2115 zone the following trade set-up is recommended:
Timeframe: D1
Recommendation: Long Position
Entry Level: Long Position @ 1.2045
Take Profit Zone: 1.2380 – 1.2520
Stop Loss Level: 1.1945
Should price action for the GBPUSD breakdown below 1.1985 the following trade set-up is recommended:
Timeframe: D1
Recommendation: Short Position
Entry Level: Short Position @ 1.1900
Take Profit Zone: 1.1605 – 1.1700
Stop Loss Level: 1.1985
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