GBP/USD – Slight Gains For Pound in Light Trade

GBP/USD has posted slight gains on Wednesday, as the pair trades in the mid-1.55 line in the North American session. On the release front, US Unemployment Claims dropped to 280 thousand, beating the forecast. Crude Oil Inventories was unexpectedly strong, posting a gain of 7.3 million last week. There are no British releases on Wednesday.

US Unemployment Claims continues to drop, reflecting a brighter employment picture as the economy continues to pick up steam. The indicator dropped to 280 thousand last week. This easily beat the estimate of 291 thousand and marked a fourth straight drop. There was excellent news on Tuesday, as GDP soared by 5.0% in Q3, ahead of the estimate of 4.6%. This marked the indicator’s strongest gain since the third quarter of 2003. The US economy is expected to continue to surge in 2015, driven by increased consumer spending and confidence. The news was not as positive from Core Durable Goods Orders, which posted a decline of 0.4%, its fourth decline in five readings. The reading was well off the estimate of 1.1%. Durable Goods Orders looked even worse, with a reading of -0.7%. This surprised the markets which had anticipated a strong gain of 3.0%.

Elsewhere in the US, housing data continues to weaken as New Home Sales slipped to 438 thousand, its poorest showing since July and well short of the forecast of 461 thousand. UoM Consumer Sentiment continues to rise, hitting 93.6 points in December. This marked its highest level since February 2007, as the US consumer remains very optimistic about the economy as we move into 2015.

On Tuesday, British GDP came in at 0.7% in the Q3, matching the forecast. This was slightly lower than the revised release for Q2 of a 0.8% gain, but still a very respectable figure. Current Account surprised as the deficit ballooned to GBP 27.0 billion, much higher than the estimate of GBP 21.1 billion. Mortgage Approvals softened for a fifth straight month, dropping to 36.7 thousand. This missed the forecast of 37.3 thousand.

GBP/USD for Wednesday, December 24, 2014

GBP/USD December 24 at 16:15 GMT

GBP/USD 1.5554 H: 1.5558 L: 1.5505

GBP/USD Technical

• GBP/USD has been marked by some choppiness during the day. The pair touched support at 1.5505 in the Asian session.
• On the upside, 1.5644 remains a strong line.
• 1.5505 is a weak support level. 1.5392 is stronger.
• Current range: 1.5505 to 1.5644

Further levels in both directions:

• Below: 1.5505, 1.5392, 1.5282 and 1.5165
• Above: 1.5644, 1.5717, 1.5864, 1.6000 and 1.6141

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 small losses. The ratio has a majority of long positions, indicative of trader bias towards the pound continuing to move higher.

GBP/USD Fundamentals

• 13:30 US Unemployment Claims. Estimate 291K. Actual 280K.
• 15:30 US Crude Oil Inventories. Estimate -2.4M. Actual 7.3M.
• 17:00 US Natural Gas Storage. Estimate -81B.

*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.