GBP/USD – Limited Movement as US Housing Data Shines

The pound is showing little movement on Tuesday, as GBP/USD trades in the mid-1.61 range. On the release front, UK Public Sector deficit increased in September. In the US, Existing Home Sales came in at 5.17M.

In the US, housing data looked strong as Existing Home Sales climbed to 5.17M, up from 5.05M last month. The strong reading easily beat the estimate of 5.11M and was the indicator’s strongest performance in a year. With job data continuing to improve and consumer confidence running high, the housing sector is showing signs of growth, and this bodes well for the US economy. We’ll get a look at New Home Sales on Friday.

US releases wrapped up last week on a high note, as UoM Consumer Sentiment climbed to 86.4 points, its highest reading since July 2007. The markets had expected a reading of 84.3 points. This indicates that the US consumer remains optimistic about the economy and is not overly concerned about warnings of a global slowdown. On the housing front, Building Permits and Housing Starts met expectations. Strong US employment numbers continue to drive the US recovery, as US job claims dropped to 264 thousand, marking a 14-year low. The estimate stood at 286 thousand.

GBP/USD for Tuesday, October 21, 2014

GBP/USD October 21 at 15:15 GMT

GBP/USD 1.6135 H: 1.6184 L: 1.6126

GBP/USD Technical

S3 S2 S1 R1 R2 R3
1.5717 1.5864 1.6000 1.6141 1.6263 1.6382

 

  • GBP/USD has been marked by choppy trading during the day, with the pair testing resistance at 1.6141.
  • The round number of 1.6000 continues to provide strong support.
  • On the upside, 1.6141 is under strong pressure. 1.6263 is stronger.
  • Current range: 1.6000 to 1.6141

Further levels in both directions:

  • Below: 1.6000, 1.5864, 1.5717, 1.5644 and 1.5460
  • Above 1.6141, 1.6263, 1.6382 and 1.6484

OANDA’s Open Positions Ratio

GBP/USD ratio is pointing to gains in short positions on Tuesday. This is consistent with the pair’s movement, as the pound has posted slight losses. The ratio has a slight majority of long positions, indicative of trader bias towards the pound moving higher.

 

GBP/USD Fundamentals

  • 8:30 UK Public Sector Net Borrowing. Estimate 9.3B. Actual 11.1B.
  • 9:35 British 10-year Bond Auction. Actual 2.15%.
  • 14:00 US Existing Home Sales. Estimate 5.11M. Actual 5.17M.

 

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.