GBP/USD is not showing much movement as we start the new trading week. In Monday’s North American session, the pair is trading in the low-1.60 range. In economic news, US Flash Manufacturing PMI, the only release of the day, was well short of the estimate. The only British event of the day is a speech from BOE MPC Member Ben Broadbent, who will deliver remarks at an event in London.
GBP/USD was up sharply following the surprise announcement on Wednesday by the Federal Reserve not to taper its bond-buying program. Most analysts had expected the Fed to announce a scaling down of the present bond-buying program of $85 billion/month by as much as $15 billion/month. However, the Fed decided to stay the QE course for now, stating that US economic data was not strong enough to warrant QE tapering at this time. The Fed also downgraded its forecast for the economy, estimating GDP growth for 2013 at 2.0-2.3%, down from 2.3-2.6% in an earlier forecast. It also lowered its outlook for 2014 from 2.9-3.1%, down from 3.0-3.5%. The pound soared on the news, gaining over two cents and barreling past the 1.61 level.
Overshadowed by the FOMC Statement were some excellent US releases on Thursday. Unemployment Claims came in at 309 thousand, well below the estimate of 331 thousand. Existing Home Sales rose to 5.48 million, crushing the estimate of 5.27 million and posting its best level in over three years. The Philly Fed Manufacturing Index rocketed from 9.3 to 22.3 points, its best showing since May 2011. Perhaps if we’d seen this kinds of numbers a week or two ago, the Fed might have introduced QE tapering. In any event, the strong numbers boosted the US dollar, which has battled back, as it trades close to the 1.60 line.
GBP/USD for Monday, September 23, 2013
GBP/USD September 23 at 17:55 GMT
GBP/USD 1.6032 H: 1.6072 L: 1.6013
- GBP/USD is trading in the low-1.60 range in Monday trading. The pair touched a high of 1.6072 in the European session, but has retracted slightly.
- The pair continues to receive support at the significant line of 1.6000. There is a stronger support line at 1.5877.
- On the upside, the pair is facing resistance at 1.6125. This is followed by support at 1.6231. This line has remained intact since December 2012.
- Current range: 1.6000 to 1.6125
Further levels in both directions:
- Below: 1.6000, 1.5877, 1.5756, 1.5645, 1.5527 and 1.5432
- Above: 1.6125, 1.6231, 1.6300 and 1.6421
OANDA’s Open Positions Ratio
The GBP/USD ratio is showing movement towards long positions in Monday trading. This is reflected in the pair’s current movement, as the pound has posted slight gains against the dollar. The 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 pair has started the week quietly, trading slightly above the critical 1.60 line. With no major releases on Monday, we could see the pair continue to trade close to 1.60 for the remainder of today’s North American session.
- 13:00 US Flash Manufacturing PMI. Estimate 54.2 points. Actual 52.8 points.
- 13:30 US FOMC Member William Dudley Speaks. Dudley is considered neutral in his stance.
- 18:00 Bank of England MPC Member Broadbent Speaks.
*Key releases are highlighted in bold
*All release times are GMT
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