GBP/USD – Pound Hits 4-Year High Against Dollar

The British pound remains firm on Thursday, as the pair trades above the 1.68 line in the North American session. GBP/USD touched a high of 1.6842, its highest level since November 2009. On the release front, US releases had a solid day. Unemployment Claims beat expectations while the Philly Fed Manufacturing Index was up sharply, hitting a six-month high. There are no British releases until next week.

In the US, Unemployment Claims rebounded sharply, as the key indicator dropped to 300 thousand last week. This beat the estimate of 314 thousand and marked the lowest reading since May 2007. With the Federal Reserve looking to trim its QE program and speculation rising about a possible interest rate increase, every employment release is under the market microscope. There was more good news from the manufacturing sector, as the Philly Fed Manufacturing Index soared to 16.6 points, its best showing since September. This was well above the estimate of 9.6 points.

On Wednesday, Federal Reserve chair Janet Yellen said that there is little inflationary pressure on the economy, and it was unlikely that the Fed’s inflation target of 2% would be met. She added that although the economy has showed signs of recovery, unemployment remains a sore spot. The Fed has abandoned its promise to maintain interest rates at least as long as the unemployment rate is above 6.5%, but the dovish stance we are seeing from Yellen means that a rate hike is unlikely in the near future.

GBP/USD for Thursday, April 17, 2014

GBP/USD April 17 at 18:10 GMT

GBP/USD 1.6811 H: 1.6842 L: 1.6799

GBP/USD Technical

• GBP/USD has edged higher in Thursday trade. The pound touched a low of 1.6799 in the European session but has bounced back into 1.68 territory.
• On the downside, 1.6765 is providing weak support. The next support line is 1.6705.
• 1.6896 is the next resistance line.

Further levels in both directions:

• Below: 1.6765, 1.6705, 1.6549 and 1.6416
• Above: 1.6896, 1.70, 1.7210 and 1.7374.

OANDA’s Open Positions Ratio

A large majority of the open positions in the GBP/USD ratio are short, indicative of a trader bias towards the dollar posting gains against the pound.

The pound continues to put pressure on the dollar, and hit four-year highs earlier in the day. The pair is almost unchanged in the North American session.

GBP/USD Fundamentals

• 12:30 US Unemployment Claims. Estimate 316K. Actual 304K.
• 14:00 US Philly Fed Manufacturing Index. Estimate 9.6 points. Actual 16.6 points.
• 14:30 US Natural Gas Storage. Estimate 35B.

*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.