USD/GBP shot up on Thursday after a positive British GDP report. The pair has gained about 160 points, and was trading in the mid-1.54 range early in the North American session. In the US, there was good news after Unemployment Claims came in below the estimate.
The pound got a big lift from the British GDP release earlier in the day. The key indicator made an impressive jump from -0.3% to 0.3%, beating the estimate of 0.1%. The markets were pleased with the results, and the pound hit its highest levels since February. There was also good news out of the US, as Unemployment Claims looked solid, in contrast to last week’s numbers. Claims dropped from 352 thousand to 339 thousand, beating the estimate of 352 thousand. The US has posted a long string of weak data, dating back to March, and the markets will want to see more solid numbers to be reassured that the US economy is on the right track. The markets will be hoping for more good news on Friday, with the release of Advanced GDP and UoM Consumer Sentiment.
In Italy there was a positive development in the political crisis, as Enrico Letta was nominated as prime minister. Italy has been in a political impasse since inconclusive elections in February, and the impasse in the Eurozone’s third largest economy threatened to undermine the shaky Eurozone. Letta’s Democratic Party does not have a parliamentary majority, so he will have to form a coalition, which is no simple task. Letta is considered a moderate, is expected to try and form an alliance with former PM Silvio Berlusconi. Besides political difficulties, the Italian economy is in recession, and the present caretaker government hasn’t been able to continue with badly needed economic reforms. Once a new government is formed, it will need to quickly tackle the country’s deep financial problems.
GBP/USD for Thursday, April 25, 2013
GBP/USD April 25 at 15:15 GMT
1.5440 H: 1.5480 L: 1.5274
The pound has moved up sharply in Thursday trading. The pair is facing resistance at 1.5475. Given the strong upward momentum we are seeing, this line could face pressure. There is a stronger resistance line at 1.5524. On the downside, 1.5392 is providing support. The next support line is 1.5309. This line has strengthened as the pair trades at higher levels.
- Current range: 1.5392 to 1.5475
Further levels in both directions:
- Below: 1.5392, 1.5309, 1.5203 and 1.5138
- Above: 1.5475, 1.5524 and 1.5630
OANDA’s Open Positions Ratios
The GBP/USD ratio is back in action after a lull on Wednesday. We are seeing movement towards short positions. This is not reflected in the current movement of the pair, as the pound is up sharply. However, it could be an early indication that the pound’s rally may soon be at an end, and the dollar will recoup some of today’s losses.
GBP/USD has looked rather dull this week, but that was certainly not the case on Thursday, as the pound shot up against the US dollar, barreling past the 1.54 line. With the US releasing strong employment numbers, we could see pound’s sharp ascent slow down.
- British Preliminary GDP. Estimate 0.1%. Actual 0.3%.
- British Preliminary GDP. Estimate 0.0%. Actual 0.1%.
- 12:30 US Unemployment Claims. Estimate 352K. Actual 339K.
- 14:00 US Treasury Secretary Jack Lew Speaks.
- 14:30 US Natural Gas Storage. Estimate 33B. Actual 30B.
*Key releases are highlighted in bold
*All release times are GMT
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