GBP/USD – Pound Climbs Higher After Weak US Non-Farm Payrolls

The British pound continues to climb higher in Monday trading. GBP/USD has gained about one cent on the day, and is trading in the low-1.57 range in the North American session. The pound has taken advantage of weak US Non-Farm Payrolls on Friday, which has hurt the US dollar. Monday has just two minor releases, as the week starts off slowly. The US will release Consumer Credit, while the UK will publish RICS House Price Balance.

The US ended last week on a disappointing note, as the all-important Non-Farm Payrolls came in at 169 thousand, missing the estimate of 178 thousand. The Unemployment Rate dropped from 7.4% to 7.3%, but this improvement is not all that significant, given the low participation rate in the labor force. The Fed continues to keep its cards away from prying market eyes, but we’re unlikely to see QE tapering without stronger employment numbers. Chicago Fed President Charles Evans hinted that we could see some action on this front from the Fed before the end of the year.

The pound has started off September with a bang, gaining over two cents against the US dollar. British PMIs in the manufacturing, construction and services sectors were all very sharp last week, and the pound took full advantage as it pushed to higher levels. This week’s key release is Claimant Count Change, the most important UK employment indicator. A strong release could fuel the pound’s impressive rally.

 

GBP/USD for Monday, September 9, 2013

Forex Rate Graph 15/1/13

GBP/USD September 9 at 15:15 GMT

GBP/USD 1.5723 H: 1.5732 L: 1.5629

 

GBP/USD Technical

S3 S2 S1 R1 R2 R3
1.5432 1.5527 1.5645 1.5756 1.5877 1.6000

 

  • GBP/USD has posted sharp gains on Monday. The pair posted sharp gains in the European session and pushed above the 1.57 line early in North American trading.
  • The pair is facing resistance at 1.5756. This is followed by a resistance line at 1.5877. This line has remained intact since January.
  • On the downside, the GBP/USD is receiving support at 1.5645. This is followed by a support level at 1.5527.
  • Current range: 1.5645 to 1.5756

 

Further levels in both directions:

  • Below: 1.5645, 1.5527, 1.5432, 1.5309 and 1.5203
  • Above: 1.5756, 1.5877, 1.6000 and 1.6125

 

OANDA’s Open Positions Ratio

The GBP/USD ratio is comprised of a majority of short positions, which reflects a strong bias in favor of the US dollar reversing direction and posting gains against the pound.

The pound keeps on rolling and has pushed above the 1.57 line in Monday trading. Will the rally continue? With no major releases on Monday, we could see GBP/USD level off during the North American session.

 

GBP/USD Fundamentals

  • 17:00 US Consumer Credit. Estimate 12.7B.
  • 23:01 British RICS House Price Balance. Estimate 38%.

 

*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

Market Analyst at OANDA
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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