GBP/USD – Pound Shows Little Movement in Light Trade

GBP/USD showing limited movement on Tuesday, with the pair trading in the mid-1.58 range. Trading is light in the currency markets, as US banks are closed for Veterans Day. We are likely to see a much busier day on Wednesday, with the release of British Claimant Count Change and the BoE Inflation Report.

Employment numbers have been strong in the US, and this played a major role in the Fed decision to wind up QE last week. However, US Nonfarm Payrolls, the most important employment indicator, disappointed on Friday. The indicator slipped to 214 thousand, well short of the estimate of 235 thousand. On a brighter note, the unemployment rate slipped to 5.8%, its lowest level in six years. On Thursday, Unemployment Claims fell to 278 thousand. This was better than the estimate of 285 thousand and marked a three-week low.

The markets are keeping a close eye on the BoE, which will release its inflation report on Wednesday. Inflation has slowed down in the UK, which means there is less pressure on the BoE to raise interest rates. The inflation report should be treated as a market-mover by traders. As well, the UK will release key employment data on Wednesday. The markets are expecting a strong reading from Claimant Count Change, while the unemployment rate is expected to improve to 5.9%. If these key indicators meet or beat expectations, we could see the pound pull higher against the US dollar.

GBP/USD for Tuesday, November 11, 2014

GBP/USD November 11 at 14:30 GMT

GBP/USD 1.5881 H: 1.5884 L: 1.5836

GBP/USD Technical

• GBP/USD showed limited movement during the day. The pair tested support at 1.5864 in the Asian session.
• On the downside, 1.5864 was tested earlier and remains a weak support line. 1.5717 is stronger.
• The round number of 1.6000 is a strong resistance line.
• Current range: 1.5864 to 1.6000

Further levels in both directions:

• Below: 1.5864, 1.5717, 1.5644 and 1.5505
• Above: 1.6000, 1.6141, 1.6263, 1.6382 and 1.6524

OANDA’s Open Positions Ratio

GBP/USD ratio is pointing to gains in long positions on Tuesday, reversing the direction we saw a day earlier. This is consistent with the pair’s movement, as the pound has posted small gains. The ratio is pointing to a majority of long positions, indicative of trader bias towards the pound moving higher.

GBP/USD Fundamentals

• 00:01 British BRC Retail Sales Monitor. Actual 0.0%.
• 00:30 US NFIB Small Business Index. Estimate 95.1 points. Actual 96.1 points.

* Key releases are highlighted in bold

*All release times are GMT

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