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GBP/USD – Pound Moves Higher As UK Retail Sales Sparkles

GBP/USD continues to move higher this week, as the pair trades close to the 1.67 line in Tuesday’s North American session. British numbers were solid on Tuesday, as CBI Realized Sales jumped to its highest level in almost two years. BBA Mortgage Approvals also rose sharply in January and had its best showing since 2007. The news was not nearly as good out of the US, as CB Consumer Confidence slipped, as US numbers continue to point downwards.

Another key US release, another disappointing reading – this has been the recent unhappy pattern that we continue to see. The culprit on Tuesday was CB Consumer Confidence. The indicator dropped to 78.1 points, sharply lower than the estimate of 80.7 points in December. The estimate stood at 80.2 points. This is yet another key US release that has pointed downwards in January, following in the footsteps of Building Permits, the Philly Fed Manufacturing Index and Existing Home Sales. The markets will be looking for a turnaround or we could see the US dollar lose ground against its major rivals.

British numbers looked sharp on Tuesday, helping the pound continue to move higher. CBI Realized Sales jumped to 37 points compared to 14 points a month earlier, crushing the estimate of 15 points. BBA Mortgage Approvals, an important gauge of housing activity, improved to 50.7 thousand, its strongest performance since September 2007. The markets are waiting for Second Estimate GDP on Wednesday, and a strong showing could propel the high-flying pound to even higher levels.

Last week’s Federal Reserve minutes indicated that interest rates are unlikely to rise, even if unemployment drops to 6.5%. Previously, the Fed had said it would consider raising rates at the 6.5% threshold, but with unemployment falling faster than expected, Fed policymakers agreed that it would “soon be appropriate” to revise the Fed’s forward guidance regarding interest rate levels. The minutes also indicated that the Fed will likely continue trimming QE, barring any downturns in the economy.


GBP/USD for Tuesday, February 25, 2014

Forex Rate Graph 21/1/13

GBP/USD February 25 at 16:35 GMT

GBP/USD 1.6699 H: 1.6727 L: 1.6643


GBP/USD Technical

S3 S2 S1 R1 R2 R3
1.6329 1.6416 1.6549 1.6705 1.6896 1.6964



Further levels in both directions:


OANDA’s Open Positions Ratio

GBP/USD ratio is pointing to gains in long positions, continuing the trend we saw a day earlier. This is consistent with the pair’s current movement, as the pound has posted gains against the dollar. A large majority of the open positions in the GBP/USD ratio are short, indicative of a trader bias towards the dollar reversing directions and gaining ground against the pound.

GBP/USD is moving higher and is trading at the 1.67 line. The pair is showing some volatility in 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]

Currency Analyst at Market Pulse [5]
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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