The British pound continues to pick up gains against the US dollar, as GBP/USD was trading in the mid-1.53 range in Friday’s European session. The pound has now gained about one cent over the past two days, making up for losses sustained earlier in the week. Today’s only release is a speech by US Federal Reserve Governor Jeremy Stein in Charlotte. In Washington, G20 finance ministers and central bankers wind up a two day meeting in Washington.
For those market watchers who were counting on a turnaround from US releases, they’ll have to wait at least until next week, as the US continues to churn out weak economic numbers. Thursday saw more key releases and more bad news, as employment and manufacturing numbers disappointed. Unemployment Claims came in at 352 thousand, higher than the estimate of 349 thousand. The Philly Fed Manufacturing Index dropped from 2.0 points to 1.3 points, nowhere near the estimate of 2.7 points. The weak numbers have dogged the US since March, and are raising red flags about the extent of the US recovery.
The markets are keeping a close eye on the two-day G20 meeting in Washington, which wraps up on Friday. Prior to the meeting, US Treasury Secretary Jack Lew warned against currency devaluations, singling out China. Washington is also concerned about stagnation in the Eurozone, and is urging Germany to take steps to help the Eurozone’s weaker members in Southern Europe, such as Spain, Cyprus and Greece. The slumping yen is also a hot topic, as many of Japan’s trading partners have seen their exports take a hit due to a weaker yen. The G20 often sugar coats criticism of its own members, but we could see the markets react to any statements directed at the Japanese currency.
Earlier this week, the IMF released a report on global growth, and the news was not good. The IMF downgraded its 2013 forecast for global growth from 3.5% to 3.3%, and lowered the 2014 prediction from 4.1% to 4.0%. The report did not spare the UK, downgrading its growth forecast from 1.0% in January to 0.7%. The 2014 forecast was also lowered, from 1.8% in January to 1.5%. In what some analysts are calling a rebuke of government economic policy, the IMF also called on the British government to ease its austerity program, given the weak state of the UK economy.
GBP/USD for Friday, April 19, 2013
GBP/USD April 19 at 12:30 GMT
1.5335 H: 1.5368 L: 1.5272
The pound has rebounded against the US dollar, trading in the mid-1.53 range. The pair is receiving support at 1.5309. The line of 1.5203, protecting the 1.52 level, is stronger. On the upside, there is resistance at 1.5392. This is followed by resistance at 1.5475. This line has remained intact since mid-February.
Current range: 1.5309 to 1.5392
Further levels in both directions:
- Below: 1.5309, 1.5203, 1.5138, 1.5053 and 1.4988
- Above: 1.5392, 1.5475, 1.5524 and 1.5630
OANDA’s Open Positions Ratios
The GBP/USD ratio continues to trade quietly. The pair is currently moving upwards, as the pound continues to gain ground at the expense of the dollar. If the pair continues to be active, we can expect the ratio to follow suit and also show movement. Long positions continue to dominate the ratio, indicating that trader sentiment is strongly biased in favor of the pound posting more gains.
GBP/USD has been quite active, and is currently moving higher after losses earlier in the week. The pound continues to be weighed down by weak UK numbers, and the IMF report early this week was not complimentary about the way the government is handling the economy. If US numbers stabilize, we could see the dollar post gains against the pound.
- Day 1 – IMF Meetings
- Day 2 – G20 Meetings
- 16:00 US FOMC Member Jeremy Stein Speaks
*Key releases are highlighted in bold
*All release times are GMT
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