The dollar is on the move on Monday, as GBP/USD has lost close to one cent on the day. The pair is trading in the mid-1.66 range in the North American session. The dollar is riding on a wave of positive sentiment after an excellent Nonfarm Payrolls release on Friday. There are no data releases to start off the week. In the UK, BOE Deputy Governor Charles Bean speaks at an event in Darlington. Over in the US, today’s sole US release today is a speech by FOMC member Charles Plosser in Paris.
US Nonfarm Payrolls wrapped up the week on a high note, as the key employment release jumped to 175 thousand in February, up from 1113 thousand a month earlier, This was well above the estimate of 151 thousand. The Unemployment rate edged up to 6.7%, slightly above the estimate of 6.6%. With a solid Unemployment Claims earlier last week, the markets can breathe more comfortably as the Fed is likely to take its scissors and trim QE next week for the third time. New York Fed President William Dudley stated last week that the threshold to alter the Fed’s program to wind up QE was “pretty high”. In other words, short of a serious economic downturn in the US economy, we can expect the QE tapers to continue.
The Bank of England didn’t have any surprises up its sleeve last week, making no changes to interest rates or QE. The Official Bank Rate stays at 0.50%, where it has been pegged since February 2009. The BOE’s quantitative easing program remains at 375 billion pounds, unchanged since June 2012. Meanwhile, Halifax HPI surprised with a sharp gain of 2.4%, easily beating the estimate of 0.6%. This was its best showing since May 2009. The index is an important gauge of activity in the UK housing sector.
GBP/USD for Monday, March 10, 2014
GBP/USD March 10 at 14:45 GMT
GBP/USD 1.6640 H: 1.6742 L: 1.6622
- GBP/USD has dropped sharply in Monday trade. The pair dropped below the 1.67 line early in the European session and continues to lose ground.
- 1.6549 is providing support. This is followed by support at 1.6549.
- On the upside, 1.6705 continues in a resistance role. Next, there is resistance at 1.6765.
- Current range: 1.6549 to 1.6705.
Further levels in both directions:
- Below: 1.6549, 1.6416, 1.6329 and 1.6236
- Above: 1.6705, 1.6765, 1.6896, 1.6964 and 1.7087
OANDA’s Open Positions Ratio
GBP/USD ratio is pointing to gains in long positions on Monday, reversing its direction from Friday. This is consistent with the pair’s current move, as the pound has surged against the US dollar. A large majority of the open positions in the GBP/USD ratio are short, indicative of a trader bias towards the dollar continuing to move to higher ground.
GBP/USD has posted sharp losses on Monday. The pound remains under pressure in the North American session.
- 10:15 US FOMC Member Charles Plesser Speaks.
- 14:15 BOE Deputy Governor Charles Bean Speaks.
*Key releases are highlighted in bold
*All release times are GMT