GBP/USD – Firm As British GDP Meets Expectations

GBP/USD is steady in Tuesday trade, as the pair trades in the low-1.68 range. The pair continues to show little movement, unable to sustain any momentum in either direction. On the release front, British GDP continues to look sharp, as the key indicator posted a strong gain in March. In the US, Consumer Confidence remained strong, but was shy of the estimate.

British Preliminary GDP, one of the most important economic indicators, posted a strong gain of 0.8% in Q4, just shy of the estimate of 0.9%. There are three versions of British GDP, and the Preliminary indicator is the earliest and the most important. The positive release points to continuing economic growth, and will likely lead to continuing speculation about a rate hike from the Bank of England, which is likely sometime in 2015, if not earlier.

US consumers appear to be optimistic about the economy, according to the latest consumer confidence data. CB Consumer Confidence, a key indicator, posted its second straight reading of 82.3 points in March. This was shy of the estimate of 82.9, but the indicator remains at high levels. Earlier in the week, the UoM Consumer Sentiment jumped to 84.1 points in March, beating the estimate of 83.2. It marked the indicator’s highest level since June. If this optimism continues and translates into increased consumer spending, this should bode well for the US economy.

US housing numbers were on the weak side last week, but it was a different story on Monday, as Pending Home Sales soared in March. The key indicator jumped 3.4%, easily beating the estimate of 1.0%. This marked its biggest monthly gain since last May. The indicator has posted mostly declines in recent readings, so the strong gain was welcome news. Meanwhile, US consumers appear to be content, as the UoM Consumer Sentiment jumped to 84.1 points in March, beating the estimate of 83.2. It marked the indicator’s highest level since June. If the optimism continues and translates into increased consumer spending, this should bode well for the US economy.

 

GBP/USD for Tuesday, April 29, 2014

Forex Rate Graph 21/1/13

GBP/USD April 29 at 18:15 GMT

GBP/USD 1.6826 H: 1.6847 L: 1.6793

GBP/USD Technical

S3 S2 S1 R1 R2 R3
1.6549 1.6705 1.6765 1.6896 1.7000 1.7210

 

  • GBP/USD continues to trade close to the 1.68 line on Tuesday. The pair dipped below the 1.68 line early in the European session but has since moved higher.
  • 1.6765 is providing the pair with support.
  • 1.6896 is the next resistance line, 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 ratio is pointing to gains in long positions in Tuesday trading. This is consistent with the movement of the pair, as the pound has posted modest gains. A large majority of the open positions in the GBP/USD ratio are short, indicative of the dollar making gains against the pound.

The pound continues to trade close to the 1.68 line. GBP/USD has edged lower in the North American session.

 

GBP/USD Fundamentals

  • 8:30 British Preliminary GDP. Estimate 0.9%. Actual 0.8%.
  • 8:30 British Index of Services. Estimate 0.9%. Actual 0.9%.
  • 9:35 British 10-year Bond Auction. Estimate 2.82%.
  • 13:00 US S&P/CS Composite-20 HPI. Estimate 12.9%. Actual 12.9%.
  • 14:00 US CB Consumer Confidence. Estimate 82.9 points. Actual 82.3 points.
  • 23:05 British GfK Consumer Confidence. Estimate -4 points.

*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.