GBP/USD – Pound Shrugs off Dovish Carney Testimony

GBP/USD is steady on Tuesday, as the pair trades in the low-1.57 range in the North American session. On the release front, BoE Governor Mark Carney testified before a parliamentary committee, noting that UK inflation levels would remain low in the near future. BBA Mortgages continues to lose ground, falling to 37.1 thousand. In the US, GDP jumped 3.9% in Q3, beating expectations. However, CB Consumer Confidence slipped to 88.7 points.

BoE Governor Mark Carney testified before Parliament’s Treasury Committee on Tuesday, and his remarks echoed the dovish Inflation Report which was released earlier in the month.  Carney said that inflation levels will likely fall below 1% in the next several months, but should then move back towards the BoE target of 2%. Carney noted that the British economy is under pressure from weak economic conditions in Japan and the Eurozone. The markets have tempered their expectations of a rate hike as the BoE has lowered its forecasts for growth and inflation.

US economic growth continues to rack up impressive numbers, posting an excellent gain of 3.9% in Q3, well above the estimate of 3.3%. This followed a gain in Q2 of 4.2%, which also beat the estimate. The other key release, Consumer Confidence, was unexpectedly soft, dropping to 88.7 points. This was well off the estimate of 95.9 points.

GBP/USD for Tuesday, November 25, 2014

GBP/USD November 25 at 16:40 GMT

GBP/USD 1.5716 H: 1.5736 L: 1.5649

 

GBP/USD Technical

S3 S2 S1 R1 R2 R3
1.5392 1.5505 1.5644 1.5717 1.5864 1.6000

 

  • GBP/USD was choppy in the Asian and European sessions. The pair posted gains in the North American session, testing resistance at 1.5717.
  • On the upside, 1.5717 is fluid. Will the pair break above this line? 1.5864 is stronger.
  • 1.5644 is providing support.
  • Current range: 1.5644 to 1.5717

Further levels in both directions:

  • Below: 1.5644, 1.5505, 1.5392 and 1.5282
  • Above: 1.5717, 1.5864, 1.6000, 1.6141 and 1.6263

 

OANDA’s Open Positions Ratio

GBP/USD ratio has a majority of long positions, indicative of trader bias towards the pound moving higher.

GBP/USD Fundamentals

  • 9:30 BBA Mortgage Approvals. Estimate 38.5K .Actual 37.1K.
  • 10:00 British Inflation Report Hearings.
  • 13:30 US Preliminary GDP. Estimate 3.3%. Actual 3.9%.
  • 13:30 US Preliminary GDP Price Index.  Estimate 1.3%. Actual 1.4%.
  • 14:00 US HPI. Estimate 0.5%. Actual 0.0%.
  • 14:00 US S&P/CS Composite-20 HPI. Estimate 4.7%. Actual 4.9%.
  • 15:00 US CB Consumer Confidence. Estimate 95.9 points. Actual 88.7 points.
  • 15:00 US Richmond Manufacturing Index. Estimate 17 points. Actual 4 points.

* 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.

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.