GBP/USD – Firm As BOE Holds the Course

The British pound has posted slight gains on Thursday, as the pair trades in the mid-1.67 range. In economic news, Halifax HPI posted its sharpest gain in over four years. As expected, the Bank of England stayed pat, maintain current levels of the benchmark interest rate and Asset Purchase Facility. In the US, there was good news on the employment front, as Unemployment Claims dropped nicely.

In the US, there was a sigh of relief as Unemployment Claims looked solid and dropped to 323 thousand in February, down sharply from 348 thousand a week earlier. The estimate stood at 336 thousand. The US faces a big test on Friday, with the release of Nonfarm Payrolls. The markets are expecting an improvement in February, but the ADP Nonfarm Payroll release on Wednesday fell well short of the estimate. If Nonfarm Payrolls fails to meet expectations, we could see the US dollar lose ground.

The Bank of England didn’t have any surprises up its sleeve, making no changes to interest rates or QE. The Official Bank Rate stays at 0.50%, where it has been pegged since February 2009. The BOE’s quantitative easing program remains at 375 billion pounds, unchanged since June 2012. Meanwhile, Halifax HPI surprised with a sharp gain of 2.4%, easily beating the estimate of 0.6%. This was its best showing since May 2009. The index is an important gauge of activity in the UK housing sector.

 

GBP/USD for Thursday, March 6, 2014

Forex Rate Graph 21/1/13

GBP/USD March 6 at 16:45 GMT

GBP/USD 1.6740 H: 1.6750 L: 1.6686

 

GBP/USD Technical

S3 S2 S1 R1 R2 R3
1.6416 1.6549 1.6705 1.6765 1.6896 1.6964

 

  • GBP/USD has edged higher in Thursday trading. The pair moved back into 1.67 territory during the European session.
  • 1.6705 continues to provide support. . This is followed by support level at 1.6549.
  • On the upside, 1.6765 is the next line of resistance. It could be tested if the pound continues to move higher. Next, there is resistance at 1.6896, protecting the 1.69 line.
  • Current range: 1.6705 to 1.6765.

 

Further levels in both directions:

  • Below: 1.6705, 1.6549, 1.6416, 1.6329 and 1.6231
  • Above: 1.6765, 1.6896, 1.6964, 1.7087 and 1.7192

 

OANDA’s Open Positions Ratio

GBP/USD ratio is pointing to gains in long positions on Thursday, reversing its direction from the previous day. This is consistent with the pair’s current move, as the pound has edged higher against the US dollar. A large majority of the open positions in the GBP/USD ratio are short, indicative of a trader bias towards the dollar reversing direction and moving to higher ground.

GBP/USD has edged higher on Thursday. The pair is steady in the North American session.

 

GBP/USD Fundamentals

  • 7:59 British Halifax HPI. Estimate 0.6%. Actual 2.4%.
  • 12:00 BOE Asset Purchase Facility. Estimate 375B. Actual 375B.
  • 12:00 BOE Official Bank Rate. Estimate 0.50%. Actual 0.50%.
  • 00:00 US FOMC Member Richard Fisher Speaks.
  • 12:30 US Challenger Job Cuts. Actual -24.4%.
  • 13:15 US FOMC Member William Dudley Speaks.
  • 13:30 US Unemployment Claims. Estimate 336K. Actual 323K.
  • 13:30 US Revised Nonfarm Productivity. Estimate 2.6%. Actual 1.8%.
  • 13:30 US Revised Unit Labor Costs. Estimate -1.0%. Actual -0.1%.
  • 15:00 US Factory Orders. Estimate -0.4%. Actual -0.7%.
  • 15:30 US Natural Gas Storage. Estimate -134B. Actual -152B.
  • 18:00 US FOMC Member Charles Plosser Speaks.

*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.

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.