GBP/USD is showing limited movement on Thursday, as the pair trades just above the 1.60 level in North American trade. On the release front, the sole British event was Nationwide HPI. The housing indicator posted a gain of 0.5% and met expectations. In the US, Advance GDP posted a strong gain of 3.5% in Q3, while Unemployment Claims showed little change, coming in at 287 thousand. As well, Fed Chair Janet Yellen spoke at an event in Washington.
It was another solid performance from US GDP, which posted a strong gain of 3.5% in Q3, ahead of the estimate of 3.1%. Although this was short of the Q2 reading of 4.0%, the two readings mark the strongest six-month gain we’ve seen in ten years. Unemployment Claims increased slightly to 287 thousand, slightly higher than the previous reading of 284 thousand. However, the four-week average remains at multi-year lows, pointing to an improving labor market.
The US dollar posted strong gains on Wednesday, boosted by a hawkish Federal Reserve policy statement. The Fed said that the labor market is strengthening and inflation remains on target, although it did note that the labor market participation rate remains low. As expected the Fed completed the taper of its QE3 program. The asset-purchase program was initially started in 2008, at the height of the economic crisis, in order to boost a weak US economy. The termination of the QE is a symbolic step which is a vote of confidence from the powerful Fed that the US economy is on the right track.
Despite a strong US recovery, durable goods data continues to point to weakness in the manufacturing sector. In September, Core Durable Goods Orders dropped 0.2%, its second decline in three months. This was well short of the estimate of 0.5%. Durable Goods Orders followed suit with a decline of -1.3%. This was the indicator’s second straight decline and missed the estimate of 0.4%. There was much better news from CB Consumer Confidence, as the indicator climbed to 94.5 points, up sharply from 86.0 points. The easily beat the estimate of 87.4 and marked a 7-year high.
GBP/USD for Thursday, October 30, 2014
GBP/USD October 30 at 16:05 GMT
GBP/USD 1.6024 H: 1.6027 L: 1.5952
- GBP/USD showed little movement in the Asian session. The posted gains in the European session, breaking above resistance at the round number of 1.6000. The pair is steady in North American trading.
- 1.6000 has reverted to a support role as the pound has posted gains. Will this key level see further action during the day? 15864 is stronger.
- 1.6141 is a strong resistance line.
- Current range: 1.6000 to 1.6141
Further levels in both directions:
- Below: 1.6000, 1.5864, 1.5717 and 1.5644
- Above: 1.6141, 1.6263, 1.6382, 1.6524 and 1.6643
OANDA’s Open Positions Ratio
GBP/USD ratio is pointing to gains in long positions on Thursday. This is consistent with GBP/USD, which has posted slight gains. The ratio has a majority of long positions, indicative of trader bias towards the pound posting gains.
- 7:00 British Nationwide HPI. Estimate 0.4%. Actual 0.5%.
- 7:45 BoE Deputy Governor Jon Cunliffe Speaks.
- 12:30 US Advance GDP. Estimate 3.1%. Actual 3.5%.
- 12:30 US Unemployment Claims. Estimate 284K. Actual 287K.
- 14:30 US Advance GDP Price Index. Estimate 2.0%. Actual 1.3%.
- 13:00 US Federal Reserve Chair Janet Yellen Speaks.
- 14:30 US Natural Gas Storage. Estimate 83B. Actual 87B.
* Key releases are in highlighted bold
*All release times are GMT
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