Advertisement
Advertisement
GBP/USD Fundamental Forecast – May 5, 2016
By:
A stronger U.S. Dollar and renewed concerns about the possibility of a U.K. exit from the European Union continued to weigh on the British Pound early
A stronger U.S. Dollar and renewed concerns about the possibility of a U.K. exit from the European Union continued to weigh on the British Pound early Wednesday. The last reading of the GBP/USD was 1.4479, down 0.0055 or -0.38%.
After enjoying a brief rally to its highest price since early January, the GBP/USD appears to be ripe for a near-term correction. Some traders are crediting a recent visit to the U.K. by President Obama for those campaigning for Britain to remain in Europe as the main reason for the recent surge in prices. However, his influence seems to be wearing off.
A weekly online poll published Tuesday by opinion firm ICM, shows 45 percent of voters were in favor of Brexit, against 44 percent who believe Britain should remain in the 28-member bloc.
Bolstering the ICM findings, a new Bloomberg Research poll which has 43 percent looking to stay in Europe while 45 percent want out.
However, a TNS online poll on Wednesday reverses the result, putting the “remain” camp on 38 percent and the “leave” on 34 percent.
The uncertainty created by the polls is likely to continue to exert pressure on the British Pound until the referendum on June 23. Yesterday, the Sterling posted its single one-day fall against the U.S. dollar in six weeks after investors digested the new poll data.
Earlier today, some losses were pared when the U.S. ADP report showed fewer jobs added to the economy in April. However, the dollar renewed its strength when data showed the U.S. trade deficit narrowed.
The GBP/USD is likely to remain under pressure today and over the near-term unless there is a dramatic shift in the polls. At this time, it is too close to call, but the price action suggests investors are leaning towards an exit from the European Union.
FxEmpire provides in-depth analysis for each asset we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports, which covers the current week and are published by Sunday before the new week begins. Daily we share any new events, forecasts or analysis that affect the current day. To achieve a full accurate understanding it is important that you study all of our data and analysis as a whole.
Today’s economic releases:
| Cur. | Event | Actual | Forecast | Previous |
| USD | API Weekly Crude Oil Stock | 1.265M | 0.500M | -1.070M |
| USD | API Weekly Cushing Crude Oil Stock | 0.382M | 1.900M | |
| NZD | Employment Change (QoQ) (Q1) | 1.2% | 0.7% | 0.9% |
| NZD | Unemployment Rate (Q1) | 5.7% | 5.5% | 5.3% |
| USD | FOMC Member Lockhart Speaks | |||
| JPY | Japan – Greenery Day | |||
| EUR | German Services PMI (Apr) | 54.5 | 54.6 | 54.6 |
| EUR | Markit Composite PMI (Apr) | 53.0 | 53.0 | 53.0 |
| EUR | Services PMI (Apr) | 53.1 | 53.2 | 53.2 |
| GBP | Construction PMI (Apr) | 52.0 | 54.0 | 54.2 |
| EUR | Retail Sales (MoM) (Mar) | -0.5% | -0.1% | 0.3% |
| EUR | German Buba President Weidmann Speaks | |||
| USD | ADP Nonfarm Employment Change (Apr) | 156K | 196K | 200K |
| USD | Nonfarm Productivity (QoQ) (Q1) | -1.0% | -1.4% | -2.2% |
| USD | Trade Balance (Mar) | -40.4B | -41.50B | -47.10B |
| USD | Unit Labor Costs (QoQ) (Q1) | 4.1% | 3.3% | 3.3% |
| CAD | Trade Balance (Mar) | -3.4B | -1.40B | -1.91B |
| USD | Markit Composite PMI (Apr) | 51.7 | ||
| USD | Services PMI (Apr) | 52.1 | 52.1 | |
| USD | Factory Orders (MoM) (Mar) | 0.6% | -1.7% | |
| USD | ISM Non-Manufacturing Employment (Apr) | 50.3 | ||
| USD | ISM Non-Manufacturing PMI (Apr) | 54.7 | 54.5 | |
| USD | Crude Oil Inventories | 1.695M | 1.999M | |
| USD | Cushing Crude Oil Inventories | 1.746M | ||
| USD | FOMC Member Kashkari Speaks | |||
| AUD | HIA New Home Sales (MoM) (Mar) | -5.3% | ||
| AUD | Retail Sales (MoM) (Mar) | 0.3% | 0.0% | |
| AUD | Trade Balance (Mar) | -2.900B | -3.410B | |
| CNY | Caixin Services PMI (Apr) | 52.6 | 52.2 |
Upcoming Economic Events that you should be monitoring:
Thursday, May 5, 2016
| Cur. | Event | Actual | Forecast | Previous |
| JPY | Japan – Children’s Day | |||
| GBP | Halifax House Price Index (MoM) | 0.1% | 2.6% | |
| GBP | Halifax House Price Index (YoY) | 9.6% | 10.1% | |
| EUR | ECB Economic Bulletin | |||
| GBP | Services PMI (Apr) | 53.5 | 53.7 | |
| USD | Initial Jobless Claims | 260K | 257K | |
| CAD | Building Permits (MoM) (Mar) | -5.0% | 15.5% | |
| USD | FOMC Member Bullard Speaks | |||
| USD | FOMC Member Bullard Speaks | |||
| USD | FOMC Member Kaplan Speaks | |||
| USD | FOMC Member Lockhart Speaks | |||
| USD | FOMC Member Williams Speaks | |||
| AUD | RBA Monetary Policy Statement |
Government Bond Auctions
Date Time Country Auction
May 04 11:05 Norway Holds bond auction
May 04 11:30 Germany Eur 4bn Apr 2021 Bobl
May 04 11:30 UK Gbp 2.75bn 1.5% 2021 Gilt
May 04 11:50 France Holds bond auction
May 04 17:20 Sweden Details of bond auction on May 11
May 05 10:30 Spain Holds bond auction
May 05 11:00 Austria Holds bond auction
May 05 11:30 UK Gbp 2.5bn 1.5% 2026 Gilt
May 09 17:20 Italy Announces details of bond auction
May 09 N/A Ireland Details of bond auction on May 12
May 10 11:30 Germany Holds I/L bond auction
May 11 11:03 Sweden Holds bond auction
May 11 11:30 Germany Eur 5bn Jun 2018 Schatz
May 12 11:10 Italy Holds bond auction
May 12 17:20 Sweden Details of I/L auction on May 19
May 12 N/A Ireland Holds bond auction
About the Author
James Hyerczykauthor
James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.
Did you find this article useful?
Latest news and analysis
Advertisement