Poor data from the UK sent the pound sharply down

The US dollar rose against most of the major currencies, with its biggest gain against the British pound. In fact, the weakness of the pounds was ubiquitous, following worse than expected economic data coming from the country.
The pound fell by nearly 1% against the dollar to 1.4110 after disappointing economic data.
Inflation in the UK slowed down more than expected in March to 1.25% in the month, from 2.7% in February. This has led investors to think that we will hardly see a recent rise in interest rates on the part of the British Central Bank.
Also, the results have prompted a number of experts to expect a slowdown in economic activity in the country that is soon expected to come out of the EU.
Late yesterday, the British pound traded at $1.4377, a new peak after the referendum. Even though, despite its decline today, the British pound is still trading substantially up against the US dollar in the last 12 months. More precisely - 11% up.

GBP/USD

Next week investors' attention will be focused on the development of the geopolitical situation amid growing tension between the US and Russia after a missile strike on Syria and the introduction of new US sanctions against Russia.
Also in the focus will remain a trade dispute between the US and China. On Monday, the spring sessions of the International Monetary Fund and the World Bank will open.
On Friday, the dollar exchange rate changed insignificantly against the basket of other currencies amid uncertainty of investors regarding a military strike against Syria.
The pound went up against the dollar: the pair GBP/USD was trading at 1.4238 after it rose to a maximum of ten weeks at 1.4297 on Friday amid forecasts that the Bank of England will raise the interest rate as early as May.
In addition to the development of geopolitical and trade conflicts, investors will follow economic reports next week, the most important of which will be the report on the volume of retail sales in the US.
Also, the inflation data in the UK will be carefully analyzed, which will provide fresh indicators for the further course of monetary policy.

Forecast for GBP/USD for April 6

The British currency continued to decline against the US dollar on Wednesday trading, the pair completed the day's session at 1.4028.
The index of business activity in the services sector of Great Britain fell sharply to the level of 51.7 in March. Given that business activity in the construction sector has also declined, the growth of the UK economy may decline in the near future. It is unlikely that the decline will be strong enough to influence the decision of the Bank of England, which is likely to raise the interest rate at the next meeting in May. However, the British pound lost almost all the advantages and again dropped to a strong level of 1.4000 against the dollar.
If today's NFP data are stronger than expected, the pound/dollar will fall below the 1.4000 level. The further dynamics of the pound, as usual, will be determined by Brexit's news. In any case, the pound will receive support from the expected increase in May, so a drop significantly below 1.4000 is unlikely.
In my forecast for today, I assume a decrease in pound/dollar to support levels of 1.4010, 1.4000 and 1.3980.

Analysis on pound

While the pound remains below 1.3950, it is vulnerable to further downturn, but if it breaks above this important level, it can expect more substantial recovery. Negotiations on the withdrawal of the UK from the EU are not going well, as the parties are still unable to reach an understanding on the single market, the customs union and the border between Ireland and Northern Ireland. Last week, there was no progress, and neither side is going to step back. The next important date for negotiations is March 22, when EU leaders will meet in Brussels to sign an agreement on the beginning of the transition period. They will also discuss the basic principles of conducting further negotiations on a number of issues, including trade.
The British economic data was not bad: activity in the service sector accelerated, judging by the latest index, and although the trade balance deficit has slightly increased, the volume of industrial production fell back at the beginning of the year. As there will be no fresh data in the UK this week, the GBP outlook is entirely dependent on the demand for the euro and US dollar. I expect that EUR/GBP will continue to fall in price.

Dollar collapsed today

Today, the dollar index DXY (that is, the dollar's rate to the basket of six world reserve currencies) collapsed to the lows that were last seen at the end of December 2014. Since the beginning of this year, the index has dropped by 2.6%. The dollar also lost in value and in relation to each of the world reserve currencies separately, "losing weight" against the euro by 0.75%, to the British pound sterling by 1.4%, to the Japanese yen by 0.8%, to the Canadian dollar - by 0.5%.
The most obvious reason for the fall of the dollar was the statement by US Treasury Secretary Stephen Mnuchin that a weak dollar is supporting the economy. In principle, he did not say anything new, just confirmed the economic pattern that a weak national currency supports production in exporting industries. American exchange speculators reacted "patriotically", because a weak dollar supports the US economy, and speculators from other countries helped the growth of their national currencies.

Inflation in the UK with the first drop for six months

UK inflation slowed down for the first time in six months in December, mainly due to prices of airline tickets and toys.
The fall in inflation led to a 3% rise in the last month of last year, compared with 3.1% a month earlier. The last result was the fastest-growing inflation in the country for over five years.
The main consumer price index, which disregards volatile food and fuel prices, fell to a five-month minimum of 2.5%.
After the data, the pound has seen some decline over other major currencies, reflecting expectations that the ECB may not be as aggressive in the future as concerns interest rates. The British national currency fell 0.2 percent to 1.3772 against the dollar.
Britain is still negotiating conditions for leaving the EU, which may trigger some slowdown in the economy in the future and hence cooling of inflation.
A number of experts comment that we can be at a turning point for inflation, largely triggered by the depreciation of the pound. And the reason for this is again linked to the pound - and more precisely to its appreciation over the dollar in recent months.
The strong British currency is likely to put the pole on the wheel of economic growth as well as on the monetary policy of the central bank in the country.

The British pound is most expensive against the dollar after the referendum

The British pound has risen to its highest level against the dollar after the referendum on leaving the country from EU borders. This happened after signals from Spain and the Netherlands for more relaxed conditions for leaving the Union.
However, the pound's rally was relatively skeptically accepted, even by the most keen bullish traders for the British pound. Many have said that further evidences are needed for successfull ending of the negotiations.
There is a need for persistence of these news and positive figures for the UK to continue to appreciate the pound. The fact is that the pound has been releasing a key level of resistance, which can then take it to 1.40. On Friday, the pair closed at 1.38594, keeping its positive moods for all the week, despite the pessure because of the uncertainties surrounding the EU talks.

The pound UK collapsed after GDP and retail sales

The pound lost 0.5% of its value after retail sales data in the country fell more than expected. This reduced the chances of an increase in interest rates at the next meeting, as was the expectation of the majority of market participants.
Retail sales in the country declined by 0.8% on a monthly basis in September, which was far worse than the average expectations for a 0.1% decline.
The growth of the British economy slowed to 1.5% yoy, in the third quarter, which was the weakest performance since October 2013.
According to Tuan Lan Nguyen, a currency strategist at Commerzbank AG, the data was quite disappointing and sent pounds down strongly against other major currencies. The expert doubts that with such data, the UK central bank will keep its promise of raising interest rates at its next meeting. However, he remains behind Commerzbank's medium-term forecast for an increase in interest rates.
The pound fell by 0.5% to 1.3135 against the dollar. With the same percentage, the pounds also fell against the euro to 89.69 pence per euro. Interest rates on 10-year British bonds fell four basis points to 1.28%.

Sound slap for Theresa May

Preliminary election results in the UK indicate a colossal failure of the Conservatives and Teresa May, who summoned early parliamentary elections to strengthen her parliamentary positions.
According to the initial forecasts, May's party, instead of raising seats in parliament, is about to lose 13.
At the same time, the Liberals are likely to strengthen their position in the new parliament by adding 30 new seats compared to the previous one.
Liberal Democrats also strengthen their positions, and they are expected to gain five new seats to occupy 12.
The National Party of Scotland also has serious loss, which lowers its number of seats in the new parliament by 19 - to 34.
However, no party will have a majority in the new parliament, after the seats of the conservative party are expected to be 300 and those of the liberals - 256.
Given the worst case scenario for the pound - the lack of a clear winner, the British currency has fallen over the rest of the major ones. The euro rose to 0.8780 or more than a cent against the pound, with the highest value reaching 0.8830.
The pound lost more than 2 cents against the dollar to 1.2750 after it was exchanged late yesterday at levels of nearly 1.3000.
It is expected to open its trading today with loss also the British FTSE.

The pound went up against the backdrop of rising activity in the services sector of Great Britain

On Wednesday, the pound rate rose to a maximum for the session after the report data recorded in March the maximum growth in the service sector of the UK for the three months of 2017.
At 08:50 GMT, the pair EUR/USD increased by 0.27% to 1.2473 from the previous value of 1.2435.
Markit reported that the index of business activity in the service sector (PMI) of Great Britain increased last month to 55.0 compared to 53.3 in February. This is the maximum after December 2016.
Economists predicted that the value of this index would be 53.5.
The report says that the rate of price increase has become the maximum for eight and a half years, which indicates a possible increase in inflation this year above 3%, as many economists predict.
The report also indicates that the growth rate of new jobs in the services sector has become minimal over the past seven months.
Together with data from similar studies on the manufacturing and construction sectors that were published this week, the latest report indicated the likelihood of a slowdown in economic growth as the consequences of the UK's withdrawal from the EU.

GBP/USD may continue to decline

Sterling in tandem with the US dollar keeps negatively. The price chart has tested the support level in the area of ​​$ 1.2414. It is known that the index of retail sales came out worse than forecast, and thus disappointed the market participants.
It also shows that the price schedule is kept above the level of support and hints at the closing of short positions. If this trend will continue, it is still possible to prevent the purchase as part of speculative trading.
It is important to note that in the middle of next week's FOMC will held publication of the report. If the US dollar against the backdrop of this event will be strengthened, the sterling may continue the downward trend.

The dollar is trading close to a 7-week low

The dollar is trading close to a 7-week low against a basket of other major currencies amid lingering concerns about the protectionist policies of Donald Trump.
The US Dollar Index, which shows the value of the dollar to a trade-weighted basket of six major currencies rose by 0.9% to 100.01 (after yesterday's low of 99.77 - the lowest value since December 8).
The decline of the dollar index reflects a concern about the uncertain Trump's economic policy, as well as fears that his protectionist stance can reduce corporate earnings and become a brake on economic growth.
On Wednesday, Trump confirmed plans to build a wall on the border with Mexico and has taken preparatory measures to combat illegal immigration.
The dollar rose against the yen: USD/JPY rose by 0.32% to 113.66, holding above a 7-week low of 112.51, recorded on Tuesday.
EUR/USD is down by 0.12% to 1.0737, close to a 7-week low of 1.0773 on Tuesday.
Pound updated 7-week high against the dollar. GBP/USD has risen by 0.21% to 1.2660.

The British pound rose to a 7-week high

The British pound rose to a 7-week high against the US dollar on news that British economic growth rates have exceeded forecasts in the fourth quarter.
GBP/USD pair peaked at 1.2673, which was the highest value since December 14, rising to 1.2634.
According to the National Statistical Service of the United Kingdom the gross domestic product grew in the fourth quarter by 0.6%, which exceeded the forecast value (0.5%) and repeated the values from the third quarter.
Hopes for certainty about the Brexit also contributed to the growth of the pound. The UK Government has stated that in the purpose of the approval by the Parliament, it will publish on Thursday a preliminary version of the decision on application of Article 50 of the Lisbon Treaty (formally run out of the EU exit procedure).

Pound rises after the speech of Theresa May

The pound rose significantly on Tuesday, reaching a maximum increase for one day since the beginning of 2009. This happened after the speech of Theresa May about the UK's withraw from the EU and the depreciation of the dollar against the backdrop of investors assess caused by the statements of the president-elect Donald Trump.
The pair GBP/USD rose by 2.66% to 1.2369, pulling back from Monday's low at 1.1985, which was the lowest value after the October crash.
This was the highest rise of the pound from January 2009.
During a speech in London May confirmed that Britain will leave the European single market after Brexit, but will try to keep the maximum access to the market due to new trade agreements.
She also announced that the final plan for Brexit will be voted in both houses of parliament.
Sterling rose sharply against the euro: EUR/GBP pair fell by 1.91% to 0.8633, before recovering after a 10-week high at 0.8851 reached on Monday.
Earlier, the British currency was supported after the publication of data on the highest inflation in the past month in the UK from mid-2014.
National Statistical Service of the United Kingdom reported that annual inflation accelerated to 1.6% in December compared with 1.2% in November. This is higher than the forecast of 1.4%.

The euro rose sharply against the dollar, catching traders by surprise

During the last for the year Asian trading the euro jumped dramatically against the US dollar, which caught traders by surprise, writes MarketWatch.
The cost of the euro flew in a few minutes from a level of $ 1.0490 to $ 1.0700, a maximum of 2 weeks. However, the rate quickly dropped to $1.0517 from $1.0490 at the close of trading prior to the closing of the trading year.
In tandem with the yen the dollar rose to 116.986 yen compared with 116.54 yen at the close on Thursday
The Pound Sterling, Australian and New Zealand dollars also rose to US currency.
The cost of the pound rose to $ 1.2346 from $1.2261 day earlier.
WSJ Dollar Index, which tracks the dynamics of the dollar against 16 major currencies, fell during the trading by 0,5%. The indicator, however, closed the year with increase by more than 3%.

Rabobank sees risk of returning of GBP/USD to 1.24 USD

The recent growth of the pound may be explained by the liquidation by speculators of accumulated large short positions and with it no new positive news from the political front in the UK, as the further strengthening of the pound seems unlikely, analysts say.

Despite the fact that currently the market is waiting for the Supreme Court of the country to take an unfavorable decision, this factor has already been calculated in the prices. In addition, it is unclear what position will take Britain into negotiations with the EU, analysts say.

They see a risk of returning of GBP/USD to 1.24 dollars over the next three months and believe that far until you have realistic prospects of keeping the access of the country to the EU single market, the growth of the pair to 1.30 dollars seems unlikely.

GBP

On Friday, the main news of the day was published data on GDP growth in the UK for the 3rd quarter. Q3 was the most difficult for England, which is primarily associated with the Brexit and, accordingly, with the significant devaluation of the GBP. In the first month of the quarter, there was a large outflow of foreign capital, it was provoked by the extremely negative forecasts of economists. Later it turned out that the devaluation of the GBP has had a more positive effect than negative, like increased domestic demand, increased inflation and stimulus measures taken by the Central Bank to improve the condition of the banking sector.
GDP also does not make exception - in the third quarter it grew by 0.5%, the value coincided with the previous period and forecasts.
As for the graphical analysis on the D1, it is believed that the pair has reached its local maximum, and now it expects the decline to the level of 1.2070 first, and then even lower - to the support of 1.1945. The nearest resistance - in the zone of 1.2495-1.2515, 1.2560 and 1.2675 next.

Canadian Carney decided to stay at the head of the Bank of England

The head of the Bank of England Governor Mark Carney said on Monday that he would remain in charge until July 2019, a year longer than planned, to ensure a smooth transition of the country from the EU, although still goes before the end of the procedure.
British pound, which collapsed by about 20 percent after the referendum on UK withdrawal from the EU because of concerns about the economic prospects for the UK, on ​​Monday rose to a daily high - $1,2240 on the news about the Carney's decision to stay as head of the regulator.
Canadian citizen Carney came under a barrage of criticism from politicians who favored a divorce with the European Union, since sounded the alarm, warning of the risks for the economy. He has the right to remain as a head of the British regulator until 2021, but decided to call it earlier.
"I am honored to extend my term in office for an additional year until the end of June 2019" - he wrote to Finance Minister Philip Hammond. The letter was published by the regulator.
"This should help to ensure an orderly transition of the United Kingdom to a new relationships with Europe."
The Government welcomed the decision of the 51-year-old financier.
Carney is the first foreigner in the 322-year history of the British central bank. The father of four students explained his desire to retire as early as 2018 by personal rather than political reasons.
However, the pressure on Carney was echoing similar pressure under which the regulators were in different countries of the West. US presidential candidate Donald Trump suspect the Fed keeping interest rates low because of the political pressures from the White House. The German Chancellor Angela Merkel called reasonable citizens' questions to the European Central Bank over the record low interest rates.

Is GBP/USD going to gain a foothold above 1.2295?

The pair GBP/USD has maintained a positive attitude on Wednesday. The British pound spent a day in a sideways channel. Partially recovered, the pair consolidated between 1.2250 and 1.2350 levels, moving up and down between them. Despite the recent growth, the general background of the pair is negative.
On Thursday in the UK comes only a report on retail sales in the country. On the motion of the trading instrument may affect the results of the debate for the US presidency, which took place early in the morning on Thursday and the release of US labor market, which will be released later in the US session.
Strengthening of the dollar as a result of the debate and in the case of a positive report on the labor market could put pressure on the pair GBP/USD. As a result, the pound sterling would eliminate all past achievements.
If the dollar will rise again, then quotes of the pound will move down. The first objective of the sellers - the level of 1.2250. Successfully overcoming it, prices will fall towards 1.2150 or below 1.2100.
At the same time strengthening of the pound would lead to growth of the last above resistance 1.2350. Further development of the dynamics of the pair will be held towards the 1.2400 and 1.2450 marks.

The pound did it

Surprisingly, but fact - the pound found strength for growth. The British currency opened the new week with a gap, collapsed against the dollar to a mark of 1.2154. However, by the end of the day, taking advantage of the weakness of the dollar, the pound has returned to the resistance of 1.22. Market participants still do not believe that the pound is able to compensate the decline and to recover above 1.24. Fears of fierce Britain from the EU-ended output procedures, significantly increased risks of inflation exceeding the target value of 2%, the drop in GDP, as well as the continuing catastrophic pace of capital outflows remain for pound status as the main market outsider. Today we are expecting the data on inflation in the UK. Considering that 23 June the British currency fell by more than 15%, it can be assumed that the consumer price index will overwrite the multi-month highs. If these assumptions are justified, the consumer activity in the country will be threatened, provoking even greater loss in the national currency.
Recommendation on GBP/USD: Sell, TP - 1,20, SL - 1,23.