The UK economy has begun to feel the post-referendum slowdown as the preliminary Q1 17 GDP growth estimate printed 0.3% q/q basis, down from 0.7% in Q4 16.
UK PMI and data France Presidential election (2nd round) are the key drivers this week.
Review of the previous week data:
- UK GDP growth rate more than halved in Q1, to 0.3% q-o-q (consensus: 0.4%).
- UK Consumer Confidence dropped one point to -7 in April.
Tues, May 02
Manufacturing PMI forecast 54.0 vs 54.2
Wed, May 03
Construction PMI forecast 52.1 vs 52.2
Thurs, May 04
Services PMI forecast 54.6 vs 55.0
INSTITUTIONAL FX POSITIONING
Scotiabank-GBP remains the largest held net short at $7.3bn, however, the position has narrowed in four of the last five weeks and bulls appear to be gaining control—adding to positions as bears liquidate theirs. Shorts remain vulnerable, just shy of the record levels from October. This data is covered up to Tuesday, April 25 & were released Friday, April 28.
The cross spotted with a double top seems at 0.8530.
Since three sessions, the cross has been facing resistance at 200Dema.
The cross re-tested the earlier breakout trendline, likely to move higher.
Potential resistance seems at 0.8530/0.8560 above this 0.8600/0.8620 exists.
Potential support finds at 0.8470 and 0.8400 below this 0.8300/0.8285 exists.
Over the medium term, trading range remains between 0.8280 and 0.8600 levels.
Until the price holds the support zone finds between 0.8300 and 0.8280 buying on a dip favors the trend.
The weekly trading trend remains favors to buy until hold 0.8400.