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GBP/USD – Pound Slips As British Housing Numbers Falter

The British pound has reversed directions in Monday trading. GBP/USD has dropped sharply and is trading in the mid-1.61 range in Monday’s North American session. In economic news, housing data in both the UK and US missed their estimates.

The new trading week started off on a disappointing note, as housing numbers in the UK and US did not meet expectations. In the UK, BBA Mortgage Approvals showed little movement, with 42.8 thousand new approvals in October. However, this was well short of the estimate of 45.2 thousand. Over in the US, the markets had anticipated good news from Pending Home Sales, with an estimate of 2.2%. However, the key indicator posted its fifth straight decline, with a reading of -0.6%. We’ll get another look at US housing numbers on Tuesday, including September data which was suspended due to the government shutdown.

There was positive news on the US employment front last week, as Unemployment Claims dropped to 323 thousand, a seven-week low. This was well below the estimate of 333 thousand. The strong figure will likely increase speculation as to when the Fed will step in and taper QE, although such a dramatic move is not considered likely before early 2014.

In the UK, we continue to see important economic indicators climb to multi-year highs. CBI Industrial Order Expectations jumped to 11 points in October, bouncing back from a weak reading of -4 points the month before. This was the manufacturing indicator’s best showing since 1995, and is another indication that the British economy continues to pick up steam. Meanwhile, Public Sector Net Borrowing posted a deficit of 6.4 billion pounds in October, an excellent improvement from 9.4 billion a month earlier. However, this was well off the estimate of 4.8 billion.


GBP/USD for Monday, November 25, 2013

Forex Rate Graph 21/1/13

GBP/USD November 25 at 16:25 GMT

GBP/USD 1.6144 H: 1.6236 L: 1.6136


GBP/USD Technical

S3 S2 S1 R1 R2 R3
1.5877 1.6000 1.6125 1.6231 1.6300 1.6476



Further levels in both directions:


OANDA’s Open Positions Ratio

GBP/USD ratio continues to point to gains in short positions, a trend we have seen since the middle of last week. This is reflected in the pair’s current movement, as the pound continues to lose ground against the US dollar. Short positions continue to dominate the open positions, reflecting a trader bias towards the US dollar posting further gains.

The pound is having a rough day and has lost around 100 points against the dollar. Will the downward momentum continue? With no further releases during the day, we could see the pair settle down during the North American session.


GBP/USD Fundamentals


*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 [4]

Market Analyst at OANDA [5]
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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