GBP/USD posted considerable gains last week.
The upcoming week has three releases, highlighted by key employment reports.
Here is an outlook for the highlights and an updated technical analysis for GBP/USD.
In the UK, inflation improved to 0.6% in December, up from 0.3%. CBI Industrial Order Expectations and GfK Consumer Confidence remained deep in negative territory, with readings of -38 and -28, respectively. Retail Sales rebounded from a previous decline but just barely, with a reading of 0.3%. This was well shy of the estimate of 1.4%. The December PMIs highlighted a tale of two sectors, as manufacturing came in at 52.9, indicating expansion. Services, however, continues to contract, and slowed to 38.8 points.
EUR/USD reversed directions last week and showed gains of 0.76%. There are six events on the calendar.
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ere is an outlook at the highlights and an updated technical analysis for EUR/USD.
German CPI posted a respectable gain of 0.5% in December, confirming the initial estimate. However, eurozone CPI came in at -0.3% for a fourth straight month. German ZeW Economic Sentiment jumped to 61.8, up from 55.0 beforehand. The eurozone indicator also improved, rising from 54.4 to 58.3.
The ECB maintained its interest rate and bond-buying levels at this week’s policy meeting. ECB President Lagarde acknowledged that Eurozone GDP for Q4 would likely be negative but said that growth was expected to rebound in 2021. PMI reports showed that the manufacturing sector remains well in expansionary territory, but the services sector is in a state of decline, with readings below the 50-level, which separates contraction from expansion.
Pound slips on weak retail sales, PMIs
January 22, 2021SharePrint
The British pound has reversed directions in the Friday session and headed lower. Currently, GBP/USD is trading at 1.3671, down 0.43% on the day. It was shaping up to be a strong week for sterling, which had spent most of the week in positive territory. Still, even with Friday’s losses, the pair is up 0.70% on the week.
Retail sales, PMI disappoint
It is a busy end to the week for British fundamentals. Retail Sales was a major disappointment in December, with a negligible gain of just 0.3%. This was well below the street consensus of 1.4%. Still, it does indicate a recovery after a dismal read of -3.8% in November, which marked the worst showing since April, when Retail Sales plunged 18.1 percent as Covid-19 shuttered the economy.
Gold edged lower following an early uptick to near two-week tops on Thursday. The risk-on mood prompted some profit-taking around the safe-haven XAU/USD.
USD/CHF oscillated in a range below 0.8900 mark through the early European session. The upbeat market mood undermined the safe-haven CHF and extended some