GBP/USD – Little Movement Ahead of Non-Farm Payrolls

It’s been a very quiet Monday in the currency markets, and GBP/USD is no exception. In the North American session, the pair is trading in the mid-1.61 range. In economic news, US Existing Home Sales disappointed, falling short of the estimate. The markets will also be keeping a close eye on Non-Farm Payrolls, which will be released on Tuesday. There are no UK releases on Monday.

With the debt crisis out of the way, at least for a while, the markets have been able to shift their attention to economic data. US Existing Housing Sales dropped to a three-month low, falling to 5.29 million. This fell short of the estimate of 5.31 million. On Tuesday, we’ll get a look at key employment data, with the release of Non-Farm Payrolls and the Unemployment Rate.

After a bitter political struggle which saw the US on the brink of a sovereign default, the Republicans and Democrats finally reached an agreement last week to reopen the government and raise the debt ceiling. However, the deal provides short-term relief only – the government will be funded until January 15, while the debt limit will be raised until February 7. So, we could be right back where we started in just a few months. The dollar initially gained ground after the agreement was announced, but was broadly lower as optimism faded. The British pound enjoyed an excellent week, posting gains of over two cents against the retreating US dollar.

The recent government shutdown in the US resulted in the postponement of some US economic releases, notably Non-Farm Payrolls, one of the most important employment releases. The September report was supposed to be released in early October, but has been rescheduled for release on Tuesday. The NFP release could have a major impact on EUR/USD. Meanwhile, last week’s Unemployment Claims came in at 357 thousand, very close to the estimate of 358 thousand. This figure was an improvement from last week, but still well above previous releases. The shutdown inflated the release, as hundreds of thousands of Federal employees were laid off. This week’s estimate is lower, with an estimate of 341 thousand.

GBP/USD for Monday, October 21, 2013

GBP/USD October 21 at 15:15 GMT

GBP/USD 1.6154 H: 1.6181 L: 1.6133

GBP/USD Technical

• The British pound is showing little movement on Monday, as the pair trades in the mid-1.61 range.
• The pair continues to face resistance at 1.6231. This is followed by resistance at the round number of 1.63oo.
• On the downside, the pair is receiving weak support at 1.6125. The next support level is at 1.6000.
• Current range: 1.6125 to 1.6231.

Further levels in both directions:

• Below: 1.6125, 1.6000, 1.5877, 1.5756 and 1.5645
• Above: 1.6231, 1.6300, 1.6421 and 1.6512

OANDA’s Open Positions Ratio

GBP/USD ratio is unchanged in Monday trading. This is consistent with the movement of the pair, which is showing little movement. Short positions maintain a very significant majority of open positions, reflecting a trader bias towards the US dollar posting gains against the pound.

The pair has been showing little movement on Monday, and we could see GBP/USD continue to drift during the North American session.

GBP/USD Fundamentals

• 12:00 FOMC Member Charles Evans Speaks.
• 14:00 US Existing Home Sales. Estimate 5.31M. Actual 5.29M.
• 14:30 US Crude Oil Inventories. Estimate 3.4M.

*Key releases are highlighted in bold

*All release times are GMT

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.