GBP/USD – Pound Stable Ahead of UK Job Data

GBP/USD is calm on Tuesday, as the pair trades just above the 1.68 line the North American session. On the release front, US JOLTS Jobs Openings improved last month, but fell short of expectations. There are no British releases on Tuesday. However, we’ll get a look at key employment numbers on Wednesday, with the release of British Claimant Count Change and the unemployment rate.

In the US, JOLTS Job Openings improved to 4.67 million, its third consecutive gain from the previous release. However, this fell short of expectations, as the estimate stood at 4.74 million. Employment indicators are under the market microscope, as the strength of the labor market is one of the most important factors influencing the Federal Reserve regarding the timing of an interest rate hike. A rate increase is expected by mid-2015, but stronger economic data, especially on the employment front, could hasten a move by the Fed.

The markets are keeping a close eye on upcoming UK employment numbers. Similar to the situation in the US, there is speculation about a rate hike, and improving job data will add pressure to the BOE to make a move sooner rather than later. As well, Claimant Count Change and the unemployment rate are market movers, so any surprises could quickly affect the movement of GBP/USD. The markets are expecting strong showings from both indicators.

GBP/USD for Tuesday, August 12, 2014

GBP/USD August 12 at 15:40 GMT

GBP/USD 1.6804 H: 1.6810 L: 1.6757

GBP/USD Technical

• GBP/USD lost ground in the Asian session, but reversed course and has moved higher in the European and North American session. The pair has pushed above the 1.68 line as the dollar remains under pressure.
• The round number of 1.67 is providing strong support.
• 1.6825 is an immediate resistance line and could break during the day. 1.6920 is stronger.
• Current range: 1.6700 to 1.6825.

Further levels in both directions:

• Below: 1.6700, 1.6556, 1.6484 and 1.6426
• Above: 1.6825, 1.6920, 1.7000 and 1.7183

OANDA’s Open Positions Ratio

GBP/USD is almost unchanged in Tuesday trade. This is not consistent with the movement of the pair, as the pound has posted small gains. The ratio has a small majority of long positions, indicative of slight trader bias towards the pound moving higher.

GBP/USD Fundamentals

• 11:30 US NFIB Small Business Index. Estimate 96.3 points. Actual 95.7 points.
• 14:00 US JOLTS Job Openings. Estimate 4.74M. Actual 4.67M.
• 18:00 US Federal Budget Balance. Estimate -98.2B.

* 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.