Market Analysis: GBP/USD likely with a slow start into the week, but hopeful for 1.3000

By Admiral Markets

Source: Economic Events February 18, 2019 – Admiral Markets’ Forex Calendar

Due to Monday being President’s Day, a bank holiday in the US, not only is the economic calendar very thin, but trading hours for some markets are shorter than usual.

That said, market volatility will likely be below average, same also with FX markets – it seems to make sense to look forward to the data coming in tomorrow: UK employment numbers.

Even though the data itself shouldn’t be considered a fundamental game-changer for the UK economy (due to the uncertainty surrounding Brexit, even the unemployment data isn’t expected to influence the BoE policy in one direction or the other), nevertheless, in combination with last week’s Retail Sales data for the US and UK and the wider technical picture, GBP/USD still remains an interesting prospect.

The aforementioned US Retail Sales data came in at an unexpectedly disappointing -1.2% for December for the biggest drop since September 2009, while retail trade in the UK rose 1% going into January, reversing a 0.7% drop in December, easily beating market expectations of a 0.2% gain.

In combination with the re-test of the trendline (blue) in the upcoming days, and Brexit uncertainty, a push higher with a target around 1.2950/3000 could be due. This can be considered a given as long as we trade above 1.2750/2770:

Source: Admiral Markets MT5 with MT5-SE Add-on GBP/USD 4-hour chart (between November 24, 2017, to February 15, 2019). Accessed: February 15, 2019 at 10:00pm GMT – Please note: Past performance is not a reliable indicator of future results, or future performance.

In 2014, the value of the GBP/USD fell by 5.9%, in 2015, it fell by 5.4%, in 2016, it fell by 16.3%, in 2017, it increased by 7.4%, in 2018, it fell by 5.6%, meaning that after five years, it was down by 22.9%.

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Source: Market Analysis: GBP/USD likely with a slow start into the week, but hopeful for 1.3000

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