The British has edged higher on Friday, as the pair trades at the 1.68 line early in the North American session. GBP/USD has settled down after hitting four-year highs on Thursday. On the release front, there no US or British events scheduled for Good Friday.
In the US, Unemployment Claims rebounded sharply, as the key indicator dropped to 300 thousand last week. This beat the estimate of 316 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.
Comments by Federal Reserve chair Janet Yellen on Wednesday continue to weigh on the US dollar. Yellen said 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.
The crisis in the Ukraine continues to simmer, as Russian President Vladimir Putin threatened to act on his “right” to attack Ukraine. There have been several skirmishes between pro-Russian militiamen and Ukrainian forces, and casualties have been reported on both sides. Secretary of State John Kerry and his Russian counterpart met on Thursday, but a quick resolution is unlikely. Western Europe is dependent on Russian oil and gas, so we can expect the markets to react if the crisis intensifies.
GBP/USD for Friday, April 18, 2014
GBP/USD April 18 at 13:25 GMT
GBP/USD 1.6796 H: 1.6802 L: 1.6775
- GBP/USD has edged higher in Friday trade.
- 1.6765 is providing weak support. The next support line is 1.6705.
- 1.6896 is the next resistance line. This line is protecting the key 1.70 level.
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
GBP/USD is pointing to gains in long positions in Friday trade. This is consistent with the movement of the pair, as the pound has edged higher. 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 is trading quietly on Friday. With the UK markets closed for a holiday, we can expect the lack of movement to continue during the day.
- There are no British or US releases on Friday.