By FXEmpire.com

Introduction: While the ranges are wider (and so should stops be), the lines are rather distinctive, especially towards the borders of the long term wide range. This pair makes for good trades, with the new austerity program implemented in the UK, the GBP is moving more on Fundamentals now.

  • The interest rate differential between the Bank of England(BoE) and the Federal Reserve
  • High yield and attractive growth in the UK drives GBP/USD higher

Weekly Analysis and Recommendation:

The GBP/USD ended at 1.5696 just a tad under the 1.57 level. The pound had an active week, buoyed by a run of positive eco data but ultimately fading as worried investors doubted the sustainability of the economic improvement. To many people think numbers have been inflated by the Queens Jubilee and the Olympics

Retail sales data for July and the latest employment figures suggested a UK economy not in the grip of recession but one in the midst of recovery.

The puzzle of the UK economy continues with surging employment growth and falling unemployment contrasting with falling economic output.

Minutes of the August Bank of England policy meeting were supportive of the pound, showing that the committee voted unanimously to hold fire on further easing measures.

Date

Last

Open

High

Low

Change %

Aug 17, 2012

1.5696

1.5735

1.5739

1.5675

-0.25%

Aug 16, 2012

1.5735

1.5679

1.5744

1.5637

0.36%

Aug 15, 2012

1.5679

1.5674

1.5701

1.5661

0.03%

Aug 14, 2012

1.5675

1.5676

1.5727

1.5670

-0.01%

Aug 13, 2012

1.5676

1.5666

1.5717

1.5657

0.06%

FxEmpire provides in-depth analysis for each currency and commodity 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 recent analysis and information in our weeklyreports and we provide daily updates and outlooks.

Major Economic Events for the week of August 13-17, 2012 actual v. forecast for Euro, GPB, the Franc, and USD

Date

Time

Currency

Event

Actual

Forecast

Previous

Aug 14

8:30

GBP

CPI y/y

2.6%

2.3%

2.4%

9:00

EUR

German ZEW Economic Sentiment

-25.5

-19.4

-19.6

12:30

USD

Core Retail Sales m/m

0.8%

0.4%

-0.8%

12:30

USD

PPI m/m

0.3%

0.3%

0.1%

12:30

USD

Retail Sales m/m

0.8%

0.3%

-0.7%

Aug 15

8:30

GBP

Claimant Count Change

-5.9K

6.2K

1.0K

8:30

GBP

MPC Meeting Minutes

0-0-9

0-0-9

0-0-9

12:30

USD

Core CPI m/m

0.1%

0.2%

0.2%

Aug 16

8:30

GBP

Retail Sales m/m

0.3%

0.0%

0.8%

12:30

USD

Building Permits

0.81M

0.77M

0.76M

12:30

USD

Unemployment Claims

366K

365K

364K

14:00

USD

Philly Fed Manufacturing Index

-7.1

-4.7

-12.9

Aug 17

13:55

USD

Prelim UoM Consumer Sentiment

73.6

72.5

72.3

Historical: From 2010 to Present

Highest: 1.6747 USD on April 28, 2011.

Average: 1.5751 USD over this period

Lowest: 1.4229 USD on May 20, 2010.

Economic Highlights of the coming week that affect the Euro, GBP, CHF and the USD

Date

Time

Currency

Event

Previous

Aug 21

8:30

GBP

Public Sector Net Borrowing

12.1B

10:00

GBP

CBI Industrial Order Expectations

-6

Aug 22

14:00

USD

Existing Home Sales

4.37M

14:30

USD

Crude Oil Inventories

-3.7M

18:00

USD

FOMC Meeting Minutes

Aug 23

6:00

CHF

Trade Balance

2.25B

7:00

EUR

French Flash Manufacturing PMI

43.4

7:00

EUR

French Flash Services PMI

50.0

7:30

EUR

German Flash Manufacturing PMI

43.0

7:30

EUR

German Flash Services PMI

50.3

8:00

EUR

Flash Manufacturing PMI

44.0

8:00

EUR

Flash Services PMI

47.9

8:30

GBP

BBA Mortgage Approvals

26.3K

10:00

GBP

CBI Realized Sales

11

12:30

USD

Unemployment Claims

366K

13:00

USD

Flash Manufacturing PMI

51.4

14:00

USD

New Home Sales

350K

Aug 24

8:30

GBP

Revised GDP q/q

-0.7%

8:30

GBP

Prelim Business Investment q/q

1.9%

12:30

USD

Core Durable Goods Orders m/m

-1.1%

12:30

USD

Durable Goods Orders m/m

1.6%

13:00

EUR

Belgium NBB Business Climate

-11.3

Click here for updated GBP/USD News.

Originally posted here