It’s a quiet day in the currency markets on Friday, as the US markets are closed for the Fourth of July holiday. GBP/USD continues to trade in the mid-1.71 range in the European session. There are no releases out of the US or UK today, and traders can expected subdued trading activity due to the US holiday.
British PMIs are important barometers of the health of critical sectors in the UK economy, and this week’s releases were strong, which was good news for the high-flying British pound. British Services PMI did soften in May, dipping to 57.7 points, but this was within expectations. The Manufacturing and Construction PMIs pushed higher, last month, pointing to increased expansion in the manufacturing and construction sectors. Construction PMI rose to 62.6 points and has remained above the 60-point level throughout 2014, as the construction sector, buoyed by the red-hot housing market, continues to expand. British key numbers have generally been positive, and the pound has taken full advantage as the British recovery deepens. The pound enjoyed a superb month of June, climbing close to 400 points against the dollar. Will the pound’s impressive rally continue in July?
In the US, it’s been an excellent week for employment data. Nonfarm Payrolls led the way on Thursday as the key indicator bounced back in June with a strong release, coming in at 288 thousand new jobs. This crushed the estimate of 214 thousand. Unemployment Claims was steady at 315 thousand, almost replicating the estimate of 314 thousand. There was more good news from the Unemployment Rate, which continues to move downward. The indicator dipped to 6.1%, its lowest level since September 2008. The strong employment numbers are sure to increase speculation about an interest rate hike by the Federal Reserve, and after the Fourth of July holiday, the markets will be closely attuned to remarks from Federal Reserve policymakers.
GBP/USD for Friday, July 4, 2014
GBP/USD July 4 at 11:00 GMT
GBP/USD 1.7146 H: 1.7180 L: 1.7138
- GBP/USD edged higher in the Asian session but reversed directions in European trading.
- 1.7000 continues to provide strong support.
- 1.7183 remains an immediate resistance line and was under strong pressure late in the Asian session. This is followed by 1.7228, which has held firm since October 2008.
- Current range: 1.7000 to 1.7183.
Further levels in both directions:
- Below: 1.7000, 1.6920, 1.6825 and 1.6700
- Above: 1.7183, 1.7228, 1.7383 and 1.7482
OANDA’s Open Positions Ratio
GBP/USD is almost unchanged in Friday trade. This is consistent with the lack of movement we’re seeing from the pair. A substantial majority of open positions in the GBP/USD ratio are short, indicative of a trader bias towards the dollar breaking out and moving higher.
- There are no British or US releases on Friday.
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.