GBP/USD – Little Activity as US Markets Closed For Holiday

The pound is showing limited movement on Monday, as GBP/USD is trading in the mid-1.53 range. On the release front, there are no UK or US releases. US markets are closed on Monday for Presidents Day, so GBP/USD is unlikely to show much activity in light holiday trade. On Sunday, British Rightmove HPI posted a strong gain of 2.1%, marking a 4-month high.

US releases wrapped up a disappointing week on a sour note, as the UoM Consumer Sentiment slipped for the first time in five months. The key indicator dropped to 93.6 points, down sharply from 98.2 in the previous report. On Thursday, retail sales and jobless numbers softened. Core Retail Sales declined by 0.9%, while Retail Sales dropped by 0.8%. Both indicators were well off their estimates of -0.4%. There was no relief from unemployment claims, which jumped to 304 thousand, compared to 284 thousand in the previous reading. The markets had expected a stronger reading of 282 thousand.

The pound jumped 150 points on Thursday, taking advantage of a positive inflation report from the BOE. The Bank said it expects GDP to rise to 2.9% in 2015, up from 2.6% in 2014. Governor Mark Carney added that there is no concern of deflation and he expects inflation levels to rise. It wasn’t long ago that a rate hike by the BOE seemed imminent, but dropping inflation has reduced pressure for a rate hike, so it is possible that the BOE will not raise rates in 2015. This has led to a divergence in monetary stance with the US, as the Fed is expected to raise rates later in the year.

GBP/USD for Monday, February 16, 2015

GBP/USD February 16 at 16:35 GMT

GBP/USD 1.5374 H: 1.5440 L: 1.5365

GBP/USD Technical

• GBP/USD posted gains in the Asian session, testing resistance at 1.5392. The pair gave away these gains in European trade. The pair is unchanged in the North American session.
• 1.5282 is providing strong support.
• On the upside, 1.5392 is a weak resistance line. 1.5505 is stronger.
• Current range: 1.5282 to 1.5392

Further levels in both directions:

• Below: 1.5282, 1.5165, 1.5008, 1.4873 and 1.4781
• Above: 1.5392, 1.5505, 1.5642 and 1.5786

OANDA’s Open Positions Ratio

GBP/USD ratio is pointing to gains in long positions on Monday. This is not consistent with the lack of movement we’re currently seeing from the pair. The ratio has a majority of long positions, indicative of trader bias towards the pound moving higher.

GBP/USD Fundamentals

* There are no UK or US releases on Monday.

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.