The British pound has started out the week in uneventful form as the GBP/USD trades in the low-1.67 range in Monday’s North American session. On Monday, UK Manufacturing PMI matched the forecast with another strong release. In the US, today’s key event, ISM Manufacturing PMI, improved in January and beat the estimate.
Key manufacturing data looked solid on both sides of the pond on Monday. In the UK, Manufacturing PMI improved slightly to 56.9 points, matching the forecast. Over in the US, ISM Manufacturing PMI improved to 53.2 points in January, beating the estimate of 52.3. This was a strong start for US releases after a disappointing week, which saw Unemployment Claims, GDP and Pending New Homes all fall short of the estimates.
British releases looked solid last week. 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, with both improving in January.
Federal Reserve Chair Janet Yellen testified on Thursday before a Senate committee. As expected, Yellen said that the Fed remains committed to tapering QE and would like to wind up the bond-buying scheme by the fall. At the same time, she acknowledged the string of weak US releases recently and said that the Fed would closely monitor to what extent the weak numbers are due to cold weather and what portion can be attributed to a “softer outlook”. The next Fed policy meeting takes place in mid-March and the markets will be looking for another $10 billion cut to QE.
GBP/USD for Monday, March 3, 2014
GBP/USD March 3 at 16:30 GMT
GBP/USD 1.6731 H: 1.6751 L: 1.6700
- GBP/USD is showing little activity in Monday trade. The pair touched a low of 1.6700 early in the North American session.
- 1.6705 continues to provide support. This is a weak line which was tested earlier. This is followed by support at 1.6549.
- On the upside, 1.6896 is providing strong resistance,. Next, there is resistance at 1.6964, protecting the psychologically important 1.70 level.
- Current range: 1.6705 to 1.6896.
Further levels in both directions:
- Below: 1.6705, 1.6549, 1.6416, 1.6329 and 1.6231
- Above: 1.6896, 1.6964, 1.7087 and 1.7192
OANDA’s Open Positions Ratio
GBP/USD ratio is pointing to gains in short positions on Monday, continuing the direction we saw late last week. This is consistent with the pair’s current move, as the pound has edged lower. A large majority of the open positions in the GBP/USD ratio are short, indicative of a trader bias towards the dollar gaining ground against the pound.
GBP/USD is not showing much movement to start the week. The pair is steady in the North American session.
- 9:30 British Manufacturing PMI. Estimate 56.9 points. Actual 56.9 points.
- 9:30 British Net Lending to Individuals. Estimate 2.5B. Actual 2.1B.
- 9:30 British M4 Money Supply. Estimate 0.3%. Actual 0.3%.
- 9:30 British Mortgage Approvals. Estimate 74K. Actual 77K.
- 14:00 US Final Manufacturing PMI. Estimate 56.7 points. Actual 57.1 points.
- 15:00 US ISM Manufacturing PMI. Estimate 52.3 points. Actual 53.2 points.
- 15:00 US Construction Spending. Estimate 0.0%. Actual 0.1%.
- 15:00 US ISM Manufacturing Prices. Estimate 57.2 points. Actual 60.0 points.
- All Day – US Total Vehicle Sales. Estimate 15.3M.
*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.