GBP/USD – Pound Gains as GDP Matches Forecast

GBP/USD has posted gains on Wednesday, as the pair trades just below the 1.58 line in the North American session. On the release front, British GDP posted a gain of 0.7% in Q3, matching the forecast. British Preliminary Business Investment disappointed with a decline of 0.7% in Q3. It was a busy day in the US, which released a batch of data ahead of the Thanksgiving holiday.

The US released a host of key data on Wednesday, but the numbers were weak across-the-board. Unemployment Claims jumped to 313 thousand, its highest level since mid-September. Core Durable Goods Orders declined 0.9%, its third decline in four readings. The estimate stood at 0.5%. New Home Sales fell to a 3-month low, dropping to 458 thousand. This was short of the estimate of 471 thousand. Pending Home Sales was no better, declining by 1.1%, well off the estimate of 0.9%. There was better news from UoM Consumer Sentiment, which posted a fourth straight gain, rising to 88.8 points. However, this was short of the estimate of 90.2 points.

British GDP posted a respectable gain of 0.7% in Q3, matching the forecast. However, this was shy of the 0.9% gain recorded in Q2. The weaker reading reflects softer data across the UK economy in the third quarter. Earlier in the week, 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.

GBP/USD for Wednesday, November 26, 2014

GBP/USD November 26 at 16:00 GMT

GBP/USD 1.5794 H: 1.5802 L: 1.5775

GBP/USD Technical

• GBP/USD was uneventful in the Asian session. The pound remains posted gains in the European session.
• 1.5864 is an immediate resistance line.
• 1.5717 is the next support line.

Further levels in both directions:

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

OANDA’s Open Positions Ratio

GBP/USD ratio is pointing to gains in long positions on Wednesday. This is consistent with the movement of the pair, as the pound has posted gains. The ratio has a majority of long positions, indicative of trader bias towards the pound continuing to move higher.

GBP/USD Fundamentals

• 9:30 British Second Estimate GDP. Estimate 0.7%. Actual 0.7%.
• 9:30 British Preliminary Investment. Estimate -0.7%. Actual +2.3%.
• 9:30 British Index of Services. Estimate 0.7%. Actual 0.8%.
• 13:30 US Core Durable Goods Orders. Estimate +0.5%. Actual -0.9%
• 13:30 US Unemployment Claims. Estimate 287K. Actual 313K.
• 13:30 US Core PCE Price Index. Estimate 0.1%. Actual 0.2%.
• 13:30 US Durable Goods Orders. Estimate -0.4%. Actual +0.4%.
• 13:30 US Personal Spending. Estimate 0.4%. Actual 0.2%.
• 13:30 US Personal Income. Estimate 0.4%. Actual 0.2%.
• 14:45 US Chicago PMI. Estimate 63.1 points. Actual 60.8 points.
• 14:55 US Revised UoM Consumer Sentiment. Estimate 90.2 points. Actual 88.8 points.
• 14:55 US Revised UoM Inflation Expectations. Actual 2.8%.
• 15:00 US New Home Sales. Estimate 471K. Actual 458K.
• 15:00 US New Pending Home Sales. Estimate +0.9%. Actual -1.1%.
• 15:30 US Crude Oil Inventories. Estimate 0.4M. Actual 1.9M.
• 15:00 US Natural Gas Storage. Estimate -145B.

* 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.