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It was a rare, relatively quiet week for Sterling as it seemed that the reactions to the latest round of Brexit headlines were muted. Overall, Sterling beats a majority of the majors despite weak U.K. economic updates and continued Brexit uncertainty.
Overbought/Oversold Conditions
Using our new MarketMilk™ tool, we can see that all of the GBP pairs are considered Neutral on the RSI indicator.
Short-Term Trend Strength
Based on the Trend analysis for GBP pairs provided by MarketMilk™, we can see the following short-term trend direction and strength for each GBP pair:
GBP/JPY remains in a very bearish trend. Keep an eye out on GBP/USD and GBP/CHF though. Their short-term trends are bearish but may be weakening.
United Kingdom Headlines and Economic data
Monday:
- Households helped to limit hit to UK economy as it shrank in second quarter – ONS
- The UK current account deficit narrowed by £7.9B to £25.2B in Quarter 2 (Apr to June) 2019
- Net consumer credit fell to £0.9B in Aug, slightly below the average of the past year; Mortgage approvals for house purchase fell to 65,500 in August
- UK Opposition Leaders To Meet On Plan To Stop Johnson No-Deal Brexit
- UK will leave the EU on October 31: finance minister Javid says
Tuesday:
- Downturn in UK manufacturing continues as rate of job losses accelerates
- UK house price growth remained subdued in September
- The strong broad move lower in Sterling pairs during the London session was likely a reaction to headlines that the leaked British plan is rejected, on top of the weak economic updates at the beginning of the session.
- Queen looked at sacking Boris Johnson after Parliament suspension: report
- No confidence vote in UK PM Johnson unlikely until after EU summit: McDonnell
- PM Johnson to propose Brexit grand bargain but EU is sceptical
- Boris Johnson: Irish customs checks will be ‘reality’ after Brexit
Wednesday:
- Boris Johnson: No-deal only alternative to Brexit plan
- UK Shop prices fell by 0.6% on the previous year as low consumer demand and stiff competition continued to push down prices
- UK construction activity declines at second-sharpest pace since April 2009
- UK PM Johnson makes final Brexit offer to cool EU reception
- Johnson’s ‘final Brexit offer’ set for a thumbs-down from Brussels
- Irish PM says what he is hearing on UK Brexit proposals not encouraging
Thursday:
- UK service sector activity contracts in September
- UK Prime Minister Boris Johnson plans to suspend Parliament again
- Problems in Britain’s latest Brexit proposal: EU’s Juncker
- The British pound sees buying support during the London/U.S. session overlap, likely on news that Johnson’s latest plan is getting support from the Tories, bringing a round of optimism to the Brexit drama. But it’s likely that headlines of the EU and Ireland being skeptical of a Brexit breakthrough after UK PM Johnson’s offer was the catalyst to bring Sterling back down in the afternoon U.S. session.
- Tusk says EU united with Ireland on Brexit, unconvinced by British plan
Friday:
- You have one week to make a better offer, EU tells Boris Johnson
- Brexit deadline could be extended again, says UK lawmaker
- Brexit: Boris Johnson will send extension letter – court document
- Sterling trends lower during the Friday session, likely on another week of no progress in coming to a Brexit deal, and possibly off of U.S. dollar strength after the U.S. posts positive tidbits from the latest U.S. employment data (September unemployment rate falls to 3.5%, a 50-year low, as payrolls rise by 136,000).
