GBP/USD – Stable Ahead of Fed Statement, Carney Remarks

The pound has shown limited movement on Wednesday, as GBP/USD is trading in the mid-1.51 range. On the release front, BOE Governor Mark Carney will deliver remarks at an event in Dublin. In the US, all eyes are on the Federal Reserve, which will issue its monthly policy statement. Crude Oil Inventories slipped to 8.9 million, but easily beat expectations.

The Federal Reserve will be in the spotlight later on Wednesday, with the release of a policy statement at the end of a two-day meeting. The Fed is expected to continue to counsel patience regarding an interest rate hike, and persistently weak inflation means the Fed can take its time before having to make a monetary move. The markets will be combing through the statement and any clues as to the timing of rate hike could shake up the currency markets.

There was mixed numbers out of the US on Tuesday. Durable Goods Orders plunged 3.4%, marking a 4-month low. There was no relief from Core Durable Goods Orders, which declined by 0.8%, its fifth drop in six readings. The markets had expected gains from both indicators. There was much better news later in the day, as CB Consumer Confidence jumped to 102.9 points, crushing the estimate of 95.3 points. New Home Sales followed suit, rising to 481 thousand, well above the forecast of 452 thousand.

On Tuesday, Preliminary British GDP for Q4 posted a gain of 0.5% in Q4. This was lower than the gain of 0.7% for Final GDP for Q3, as economic growth has slowed down. With British growth and inflation levels easing, there is less pressure on BOE Governor Carney to raise interest rates, and this divergence with the Federal Reserve could boost the dollar at the expense of the pound.

GBP/USD for Wednesday, January 28, 2015

GBP/USD January 28 at 16:20 GMT

GBP/USD 1.5168 H: 1.5219 L: 1.5154

 

GBP/USD Technical

S3 S2 S1 R1 R2 R3
1.4873 1.5008 1.5165 1.5282 1.5392 1.5505

 

  • GBP/USD was flat in the Asian session. The pair posted gains in the European session but then retracted. GBP/USD is unchanged in the North American trade.
  • On the downside, 1.5165 is under strong pressure. 1.5008 is stronger.
  • 1.5282 is a strong resistance line.
  • Current range: 15165 to 1.5282

Further levels in both directions:

  • Below: 1.5165, 1.5008, 1.4873, 1.4781 and 1.4670
  • Above: 1.5282, 1.5392, 1.5505 and 1.5642

 

OANDA’s Open Positions Ratio

GBP/USD ratio is almost unchanged on Wednesday. This is consistent with the pair’s movement, as GBP/USD is unchanged on the day. The ratio is close to a split between long and short open positions, indicative of a lack of trader bias as to what direction the pound will take.

GBP/USD Fundamentals

  • 6:50 BOE Governor Mark Carney Speaks
  • 15:30 US Crude Oil Inventories. Estimate 4.2M
  • 19:00 US FOMC Statement
  • 19:00 US Federal Funds Rate. Estimate <0.25%

*Key releases are highlighted in bold

*All release times are GMT

 

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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.