It continues to be a very slow week for GBP/USD, as the pair trades close to the 1.61 line in Tuesday trading. Tuesday has a light schedule, with just one data release out of the US. Today’s highlights include speeches by US Treasury Jack Lew and two FOMC members. The only release out of the UK was the 10-year bond yield, which was almost unchanged from the previous month.
The UK economy continues to improve at an impressive clip, and this was confirmed in an OECD report on Monday. The report found that the world’s advanced economies grew 0.5% in Q3, with the UK leading the way with growth of 0.8%. The US followed with 0.7% growth, and Japan posted a gain of 0.5%. This was in sharp contrast to the Eurozone, which continues to experience weak growth. Germany, the locomotive of the region, posted 0.3% growth, while Italy and France both showed declines of 0.1%.
On Wednesday, the Federal Reserve will release the minutes of its most recent policy meeting. This event is a market-mover and analysts will be paying close attention to the minutes, especially regarding QE. The markets are expecting the Fed to hold off from tapering in December, as US numbers are still not as strong as the Fed would like. Market sentiment is leaning towards the Fed sticking to its present monetary policy, and any surprises in the minutes would likely shake up the currency markets.
Late last week, Federal Reserve chair-elect Janet Yellen testified before the powerful Senate Banking Committee. Yellen has been an ardent supporter of QE, and told the committee that the present level of asset purchases should continue until growth improves and unemployment falls. She said that the labor market and economy are performing “far short of their potential”, but added that she expects inflation to remain below the Fed’s target of 2%. Yellen, who is slated to become the first woman to head the Federal Reserve, will take over from Bernard Bernanke in January.
GBP/USD for Tuesday, November 19, 2013
GBP/USD November 19 at 16:15 GMT
GBP/USD 1.6098 H: 1.6128 L: 1.6060
- GBP/USD is showing little movement on Tuesday, as the proximate support and resistance lines (S1 and R1 above) show little movement.
- 1.6000 continues to provide support. This line has strengthened as the pair trades close to the 1.61 level. This is followed by support at 1.5877.
- On the upside, 1.6125 is providing weak resistance. Will GBP/USD break through? This line is followed by resistance at 1.6231, which was last tested in late October.
- Current range: 1.6000 to 1.6125.
Further levels in both directions:
- Below: 1.6000, 1.5877, 1.5756 and 1.5645 and 1.5537
- Above: 1.6125, 1.6231, 1.6300 and 1.6476
OANDA’s Open Positions Ratio
GBP/USD ratio is almost unchanged, continuing the trend we saw in Monday trading. This is reflected in the current movement of the pair, which is showing very little movement. Short positions continue to dominate the open positions, reflecting a trader bias towards the US dollar moving to higher ground.
The pair continues to trade quietly close to 1.61. With no major US releases on Tuesday, movement by GBP/USD in the North American session could be limited in scope.
- 10:34 British 10-year Bond Auction. Actual 2.73%.
- 13:30 US Employment Cost. Estimate 0.5%. Actual 0.4%.
- 13:45 US Treasury Secretary Jack Lew Speaks.
- 15:00 FOMC Member William Dudley Speaks.
- 19:15 FOMC Member Charles Evans Speaks.
- 20:00 President Barack Obama Speaks.
*Key releases are highlighted in bold
*All release times are GMT
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