GBP/USD – Pound Steady as Manufacturing Production Matches Forecast

After starting off the week with strong gains, the pound has taken a breather on Tuesday. GBP/USD is trading quietly in the low-1.64 range. On the economic front, UK Manufacturing Production posted a modest gain of 0.4%, matching the forecast. British Trade Balance posted a wider deficit than expected, while NIESR GDP recorded a nice gain of 0.8%.

It was a busy day in the UK, led by Manufacturing Production. The key indicator fell to 0.4%, down from 1.2% the previous month. However, this reading was good enough to match the forecast. The trade deficit showed little change, coming in at -9.7 billion pounds, but this disappointed the markets, which had anticipated a smaller deficit of -9.3 billion. There was some better news from NIESR GDP, a monthly indicator which helps analysts track GDP, which is only released each quarter. The indicator posted  gain of 0.8%, slightly up from the previous release of 0.7%. The solid figure points to a UK economy which is on the move and picking up steam.

In the US, employment numbers continue to shine last week. Following another strong Unemployment Claims release, Non-Farm Payrolls was almost unchanged, coming in at 203 thousand. This was well above the estimate of 180 thousand. The Unemployment Rate dropped from 7.3% to 7.0%, beating the estimate of 7.2%. The strong numbers are sure to increase the pressure on the Fed to taper QE when its meets later in December. The Fed has said that a stronger employment picture is a prerequisite to tapering, and last week’s numbers certainly increase the possibility of the Fed taking action at its December policy meeting.


GBP/USD for Tuesday, December 10, 2013

Forex Rate Graph 21/1/13

GBP/USD December 10 at 16:30 GMT

GBP/USD 1.6430 H: 1.6466 L: 1.6419


GBP/USD Technical

S3 S2 S1 R1 R2 R3
1.6125 1.6231 1.6300 1.6476 1.6600 1.6696


  • GBP/USD is showing little movement on Tuesday. The pound touched a high of 1.6466 late in the Asian session but has edged lower.
  • The round number of 1.6300 continues to provide support. This is followed by a support level at 1.6231.
  • On the upside, the pair faces resistance at 1.6476. Given the strong start by the pound this week, this line cannot be considered safe. This is followed by resistance at the round number of 1.6600, which has remained intact since August 2011.
  • Current range: 1.6300 to 1.6476


OANDA’s Open Positions Ratio

GBP/USD ratio is pointing to gains in long positions in Tuesday trading, continuing the trend we have seen since last week. This is reflected in the pair’s current movement, as the pound has posted slight gains on Tuesday. Despite this movement, short positions continue to dominate the ratio, reflecting a trader bias towards the US dollar reversing directions and gaining ground.

The pound has posted slight gains on Tuesday as it trades above the 1.64 line. The pair shrugged off Tuesday’s releases out of the US and UK, and with no further releases on the schedule, it could be an uneventful North American session.


GBP/USD Fundamentals

  • 00:01 British RICS House Price Balance. Actual 58%.
  • 9:30 British Manufacturing Production. Estimate 0.4%. Actual 0.4%.
  • 9:30 British Trade Balance. Estimate -9.3B. Actual -9.7B.
  • 9:30 British Industrial Production. Estimate 0.4%. Actual 0.4%
  • 12:30 US NFIB Small Business Index. Estimate 92.7 points.
  • 15:00 US JOLTS Openings. Estimate 3.96M. Actual 3.93M.
  • 15:00 US Wholesale Inventories. Estimate 0.3%. Actual 1.4%.
  • 15:00 British NIESR GDP Estimate. Actual 0.8%.


*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 l

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.
Kenny Fisher

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