GBP/USD – Pound Gains on Soft US Housing Data

The pound has started the week with modest gains, as GBP/USD trades in the mid-1.61 range in the North American session. On the release front, British CBI Realized Sales was unchanged at 31 points. In the US, Pending Home Sales posted a weak gain of 0.3%, well off the estimate of 1.1%.

British Retail Sales retail sales volumes continue to look strong, as CBI Realized Sales came in at 31 points for a second straight month. This was slightly ahead of the estimate of 29 points. Last week, British Preliminary GDP, one of the most important economic indicators, dipped to 0.7% in Q3, down from 0.9% in the previous quarter. This figure matched the forecast, so there was little reaction from the pound.

In the US, last week’s jobless numbers were softer than expected. Unemployment Claims rose to 284 thousand, much higher than the previous reading of 264 thousand, and above the estimate of 269 thousand. However, the markets were not overly concerned, as the four-week average, which is less volatile than the weekly release, dipped to 281,000, a 14-year low. Meanwhile, weak inflation levels continue to point to slack in the economy. On Wednesday, this trend continued with soft consumer inflation numbers. CPI and Core CPI both posted small gains of 0.1%.

 

GBP/USD for Monday, October 27, 2014

GBP/USD October 27 at 15:50 GMT

GBP/USD 1.6133 H: 1.6147 L: 1.6086

 

GBP/USD Technical

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

 

  • GBP/USD was flat in the Asian session. The pair edged higher late in the European session and has posted slight gains in North American trade.
  • The round number of 1.6000 is a strong support level.
  • On the upside, 1.6141 was tested earlier in the day and remains a weak line. 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 Monday. This is not consistent with the movement of GBP/USD, which has shown slight gains on the day. The ratio has a slight majority of long positions, indicative of trader bias towards the pound continuing to move upwards.

 

GBP/USD Fundamentals

  • 11:00 British CBI Realized Sales. Estimate 29 points. Actual 31 points.
  • 13:45 US Flash Services PMI. Estimate 57.9 points. Actual 57.3 points.
  • 14:00 US Pending Home Sales. Estimate 1.1%. Actual 0.3%.
  • 18:30 BOE Deputy Governor Nemat Shafik Speaks.

* Key releases are in highlighted 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.