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GBP/USD – Higher after Weak Numbers from UK and US

GBP/USD has moved higher in Thursday trading. Early in the North American session, the pair was trading in the high-1.52 range.  In economic news, British Retail Sales declined sharply, while in the US, Unemployment Claims and the Philly Fed Manufacturing Index both missed their estimates. 

On Thursday, the markets were treated to weak numbers from both the UK and the US. British Retail Sales, a key indicator, posted a 0.7% decline, falling sharply from the previous reading of a 2.1% gain [1]. The markets were not expecting good news, and the drop matched the forecast. In the US, key releases continue to flounder, as Unemployment Claims rose to 352 thousand, slightly above the estimate of 349 thousand. The news from the manufacturing sector was no better, as the Philly Fed Manufacturing Index dropped from 2.0 points to 1.3 points. This was well below the estimate of 2.7 points. It’s been another dismal week for US releases, as almost all key events since late March have pointed downwards. This is bound to heighten concern about the health of the US economy.

The G20 meets on Thursday in Washington, and the slumping yen will be high on the agenda. Japan’s trading partners are very unhappy about Japan’s monetary actions, which has helped make the yen much more competitive and put a dent in their exports in the process. However, the Japanese government has deflected the criticism and continues to move full steam ahead with aggressive easing steps, which it says are aimed at stamping out deflation, not manipulating the value of the yen. The yen has now slid 15% against the US dollar in 2013, and last week came very close to the psychologically significant 100 level. G20 meetings often sugar coat any criticism aimed at one of their own members, but any statements about the high value of the yen could nonetheless affect the currency markets.

In Italy, little progress has been made on the political front since the inconclusive election back in February. Coalition negotiations between the parties have gone nowhere. Mario Monti remains head of a caretaker government, which is little more than a lame duck, unable to continue with important economic reforms. Monti and center-left leader Pier Luigi Bersani are close to an agreement to choose a successor to President Giorgio Napolitano, who will step down in mid-May. The political crisis in the Eurozone’s third largest economy threatens to undermine the Eurozone, and the markets are hoping that the choosing of a new president will be the first step in the formation of a new government.


GBP/USD for Thursday, April 18, 2013

Forex Rate Graph 15/1/13

GBP/USD April 18  at 14:30 GMT

1.5283 H: 1.5312 L: 1.5218


GBP/USD Technical

S3 S2 S1 R1 R2 R3
1.5053 1.5138 1.5203 1.5309 1.5392 1.5475


The pound has shaken off Wednesday’s losses and has posted modest gains against the US dollar. The pair faces resistance at 1.5309. This line has already been breached today, and could face further activity. There is stronger resistance at 1.5392. On the downside, 1.5203 is providing support. This line is protecting the 1.52 level. There is stronger support at 1.5138. 

Further levels in both directions:


OANDA’s Open Positions Ratios

GBP/USD ratio is not showing much activity in the Thursday session. The pound has posted modest gains against the dollar, so we are seeing some movement in the pair. If this continues, we can expect the ratio to also show some activity. Long positions continue to dominate the ratio, indicating that trader sentiment is strongly biased in favor of the pound posting more gains.

The pound has made some gains today, and we could see it test the 1.53 line. GBP/USD was not hurt by weak numbers out of the US and UK, so we could see the pair continue trading close to 1.53.


GBP/USD Fundamentals


*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 [5]

Market Analyst at OANDA [6]
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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