No wonder, the currency market traded quietly on Friday amid the empty economic calendar. The data on personal income and spending in the US was the only publication to set the market in motion. In fact, GBP/USD responded with modest fluctuations because the data is of secondary importance.
The pound sterling lost some ground. In fact, it made efforts to assert strength because personal spending in the US stayed flat in May, confounding the forecast for a 0.4% increase. Flat personal spending is a negative sign. It means that being the main driver of the US economy, consumer activity logs zero growth. As personal income contracted 2.0%, there are no conditions for expansion in consumer activity.Curiously enough, this data is to blame for sterling’s weakness. Analysts had predicted personal income to shrink 3.0%. Still, such downbeat data both on personal spending and income is better than expected. GBP/USD has been trading with minor fluctuations. Today, the currency pair will hardly be able to escape from the range-bound market. Today, the economic calendar is also empty, hence there are no market catalysts.
US Personal Spending
GBP/USD has been able to pass downwards almost half of the correctional move that occurred in June 21-23. The psychological level of 1.4000 serves as resistance where the price ended its upward correction.On the grounds of the average volatility per 24 hours, the currency pair seems to moderate its decline. At the same time, traders are stepping up speculative activity that could invigorate the dynamic of GBP/USD.Looking at the current price action, the pair has got stuck at around 1.3870 that coincides with the halt on June 22.We can suppose that the price halt at near 1.3870 acts as interim support. In case the price holds firmly below 1.3855, it is likely to move lower towards 1.3785.
In terms of complex indicator analysis, we see that technical tools are signaling selling opportunities as GBP/USD is currently trading lower after the recent upward correction.