British Pound Live On Monday 1st July: GBP Strengthens Against The Dollar On Carneys First Day In Office

Modified: Monday, 01 July 2013 15:33 BST

Can the GBP bounce back from another poor week or will it start July the way it finished June? Analysis suggests the latter, but with a string of GBP data it is likely to be an interesting day for new Bank of England governor Mark Carney.

15.32 GBPUSD Technical Analysis Ahead Of US Manufacturing Data

GBP/USD has remained at a steady level just above Fridays close whilst the proximate support and resistance lines remain in place (S1 and R1 above). On the downside, there is a degree of support at 1.5203 but looking relatively minimal having been briefly broken in this mornings trading. A much stronger support level lies at 1.5111 which has has remained intact since mid-March. If broken this could see a move towards the next support level at 1.5000 and then 1.4896.

On the upside, we continue to see resistance at 1.5309 which if breached would then see the next resistance line fall at the 1.5432 mark followed by 1.5557 and 1.5800. The pair is currently moving in a range of 1.5203 to 1.5309.

Kenny Fisher, Currency Analyst at Oanda, said of todays activities, “Last month, British PMIs from the various sectors looked solid, and at the time, this bolstered the pound. Will we see a repeat in July? Perhaps yes, as Manufacturing PMI looked sharp on Monday.”

14.32 GBP Struggles To Maintain Gains On The US Dollar Despite Strong Manufacturing Data

The GBP lost some of its morning gains against the US dollar ahead of the US manufacturing data to be released shortly. The GBPUSD hit highs of 1.5246 through the morning before falling back to levels around the 1.5218 mark in early afternoon trading – a level which still represents again on Fridays closing.

Traders are expecting support at the 1.5182 mark whilst upside resistance is likely to be found at 1.5345, a high from June 27^th.

The positive start to the week from the pound followed data which indicated the highest growth rate of manufacturing activity within the UK for over two years last month.

The pound touched session highs earlier in the session after data showed that manufacturing activity in the U.K. expanded at the fastest pace in more than two years in June. Rob Dobson, senior economist of the organisation that compiled the data – Markit – said of the unexpectedly positive news:

'The survey suggests that manufacturing output rose by around 0.5 per cent over the second quarter. Taken with recent signs of service sector strength and a stabilising construction industry it paints a picture of UK economic growth picking up from the opening quarter’s 0.3 per cent to at least 0.5 per cent.

'It therefore seems increasingly unlikely that the Bank of England’s policymakers will opt for further asset purchases at its meeting later this week.'

13.30 Afternoon Spot Rates

GBPUSD is up 0.06% on the previous trading days close at 1.5222

EURGPB is up 0.11% at 0.8561

GBPJPY is up 0.61% at 151.7530

GBPAUD is down 0.42% at 1.6577

NB: The above are wholesale market quotes; your bank will affix its own discretionary spread when passing on your retail rate. However, an independent FX provider will guarantee to undercut your bank's offer, thus delivering more currency. Please find out more here.

12.00 RBS Forex Analysis Team See Buy Opportunities In GBPUSD

The RBS FX research team have suggested that the GBPUSD could be representing buy opportunities at current levels but that a close below the 1.50 mark could signal difficult times ahead: “Simply eyeballing a year-to-date chart of GBP/USD suggests that 1.50 - 1.52 is a buy zone for different types of investors. If this fails to hold and we start printing closes below 1.50, the outlook would be far more bearish, in our view”.

10.41: EURGBP Volatile In Morning Trading

EURGBP had begun the day with strong gains before positive UK data had an overdue positive response from the GBP and the pair dropped back to 0.8551 having reached highs of 0.8593. The UK releases has prompted support for the pound sterling and cost EURGBP 40pips with positive news led by the PMI and Mortgage Approvals. Euro data has not disappointed but has failed to provide any positive response either, with most analyst predictions being correct.

Saeed Amen, a strategist at Nomura suggested that the technicals for the pair were bearish but ranging, saying “RSI has risen, suggesting upward momentum.”

10.06: Mortgage Approvals At Highest Rate Since 2009 Supporting GBP Strength

Mortgage approvals in the UK increased to their highest level since 2009 todays data reléase from the Bank of England showed. The release showed that approvals increased to 58,242 in May having been 54,354 in April and beating the market expectations of 55,050.

GBP showed gains on the back of the positive data particularly against the US Dollar where it moved from a position below Fridays close to 0.11% above it at 1.5229.

It remained below Fridays close against the Australian Dollar and the Euro but cut some of the days losses.

09.40: GBP Jumps Higher On Positive UK Data

The UK PMI Manufacturing expansion increased to 52.5 points in June, from 51.5 points in May, according to data released today by Markit – a point higher than originally expected. The UK consumer credit was up 34 per cent, net lending to individuals down 29 per cent, and mortgage approvals up 8 per cent.

09.26: Morning Spot Rates As GBP Starts The Day Lower Ahead of Data Releases

The pound struggled once again in early morning trading with the GBPJPY the only notable example of the pound strengthening.

GBPUSD is down 0.17% on the previous trading days close at 1.5187

EURGPB is up 0.44% at 0.8590

GBPJPY is up 0.28% at 151.2500

GBPAUD is down 0.45% at 1.6572

09.06: GBP Data Expected To Be In Line With Or Stronger Than Market Consensus

“On the domestic front, we have the manufacturing PMI, mortgage lending and approvals, consumer credit, and M4 money supply. We expect these to print in line with, or be stronger than, the market consensus with the exception of mortgage lending which should rebound sharply next month on the back of today’s jump in approvals,” said Jonathan Sharp, Senior Economist at Lloyds bank.

He went on to say of the European and US data, “External data are set to be more mixed. The German, French, Italian, Spanish and euro area manufacturing PMIs are expected to signal that the sector remains in recession. Meanwhile, euro area unemployment is forecast to edge up to a new record of 12.3%, while inflation remains subdued. The US ISM index should show that growth in the manufacturing sector has resumed, albeit at a tepid pace.”

07.45 – Pound Sterling Set To Continue To Struggle Against The US Dollar In The Coming Week

Well we welcome Mark Carney to the Bank of England fold this morning, tasked with the unenviable task of guiding the British economy bank to its former glory. Unfortunately for the GBP it is likely that things will get worse before they get better with the general attitude from the Bank of England unlikely to help the GBP in the short term. With the GBP data to be released later today, many are predicting a difficult week following a difficult end of the month.

For the biggest GBP pair, GBPUSD, the technical analysis also supports the fundamental outlook, with the possibility of a move down to the 1.50 mark an increasing reality. Support for the pair lies at 1.5184, 1.5165 and finally 1.5111 – a low not seen since May. Upside resistance of 1.5240 will be difficult to break but should it do so then a move up to 1.5279 could be seen with the next resistance level after that 1.5293.

Eric Theoret, Strategist at Scotiabank, said of the pair “momentum, directional, and trend indicators are all suggestive of further downside. RSI at 38 leaves room for decline from current levels, with risk of fall down to 1.50 on continued retracement of early June rally”

07.00 Todays Key Events On A Busy Day For The Bank Of England

A busy day for the Bank of England and new governor Mark Carney with a string of data releases. All times are GMT +1.

08.30 – 09.00 (Europe) The European morning starts off with Markit Manufacturing data from several European countries – France, Germany, Italy and Greece as well as the European Union as a whole. Rarely a huge mover of the markets but worth keeping an eye on, particularly that of Germany and the EU as a whole as they could add to the growing collection of indications that the Germany economy is improving at an increasing rate.

09.00 (UK) Mark Carney officially becomes the new Governor of the Bank of England, serving a 5 year term.

09.28 (UK) The UK releases their Markit Manufacturing data. A result above 50 signals is bullish for the GBP, whereas a result below 50 is seen as bearish.

09.30 (UK) The Bank of England release data on consumer credit, the amount of money that individuals have borrowed throughout May. Any growth or high numbers are generally seen as positive for the GBP.

09.30 (UK) The Bank of England also releases the Mortgage Approvals data which is one of the key indicators of how the housing market is performing. Growth or high numbers will support strength in the GBP.

09.30 (UK) The Bank of England round off a busy morning with the Net Lending figures which ultimately indicates the populations willingness to spend money. A high reading is there for good for the GBP and vice versa.

10.00 (Europe) Consumer Price Index for the European Union is a key indicator of inflation and changes in purchasing trends. Any significant movements will likely have a big impact on the Euro pairs.

13.58 (US) The US releases its Markit Manufacturing data. As above, figures over 50 will indicate a growing economy whilst any number under that indicates an economic contraction.

15.00 (US) The US follows up on the Markit Manufacturing data with a string of releases including construction spending, ISM Manufacturing PMI or ISM Prices Paid.