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GBP/USD – Slight Gains As US Employment Numbers Disappoint

The British pound is showing little movement on Thursday, as the pair trades in the high-1.66 range in the North American session. In economic news, US key releases were a mix, as Core Durable Goods Orders posted a strong gain, but Unemployment Claims came in well above the estimate. The Federal Reserve is in the spotlight, as Fed Chair Janet Yellen testifies before a Senate committee. There are no British releases on Thursday.

US manufacturing data looked strong, as Core Durable Goods Orders jumped 1.1% in January. This surprised the markets, which had expected a decline of -0.1%. Unemployment Claims did not look as sharp, as the key indicator rose to 348 thousand, well above the estimate of 333 thousand. Meanwhile, a nasty streak of weak US releases ended on Wednesday as New Home Sales jumped by 468 thousand, crushing the estimate of 406 thousand. It was the housing indicator’s best showing since last June, and helped allay concerns about the health of the housing sector, following weak housing numbers last week.

The markets are keeping a close eye on the Federal Reserve, as Janet Yellen testifies before the Senate on Thursday. Last week’s Fed 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. Yellen is expected to reiterate that the Fed will likely continue trimming QE, barring any downturns in the economy.

British releases looked solid on Wednesday. Second Estimate GDP posted a gain of 0.7%, matching the forecast, as British economic activity continues to head in the right direction. Preliminary Business Investment sparkled with a gain of 2.4%. This was a strong improvement from the 1.4% gain in the previous release. However, the indicator fell short of the estimate of 2.6%. Earlier in the week, CBI Realized Sales and BBA Mortgage Approvals looked strong, improving in January.


GBP/USD for Thursday, February 27, 2014

Forex Rate Graph 21/1/13

GBP/USD February 27 at 16:15 GMT

GBP/USD 1.6691 H: 1.6694 L: 1.6617


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 short positions, reversing the trend we’ve seen all week. This is not consistent with the pair’s current movement, as the pound is posting 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 continues to post gains on Thursday. The pound continues to move higher in the North American session and could move into 1.67 territory.


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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