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GBP/USD: Slight Losses As UK PMI Dips, US Employment Numbers Sparkle

The British pound is slightly lower against the US dollar on Thursday. However, GBP/USD continues to trade at high levels, as the pair trades in the mid-1.71 range in the North American session. On the release front, British Services PMI softened in June and missed the estimate. In the US, Nonfarm Payrolls jumped last month, and the Unemployment Rate dropped to its lowest level in almost six years. US Trade Balance improved slightly in June.

British Services PMI lost ground last month, dipping to 57.7 points, shy of the estimate of 58.1 points. Earlier in the week, Manufacturing and Construction PMIs moved higher, pointing to increased expansion in the manufacturing and construction sectors. On Wednesday, Construction PMI rose to 62.6 points, beating the forecast of 59.7. The index has remained above the 60-point level throughout 2014, as the construction sector, buoyed by the red-hot housing market, continues to expand. Earlier in the week, British Manufacturing PMI improved slightly in the June release. The index came in at 56.7 points, posting a seven-month high.

In the US, it’s been an excellent week for employment data. Nonfarm Payrolls led the way on Thursday as the key indicator bounced back in June with a strong release, coming in at 288 thousand new jobs. This crushed the estimate of 214 thousand. Unemployment Claims was steady at 315 thousand, almost replicating the estimate of 314 thousand. There was more good news from the Unemployment Rate, which continues to move downward. The indicator dipped to 6.1%, its lowest level since September 2008. The strong employment numbers are sure to increase speculation about an interest rate hike by the Federal Reserve, and after the Fourth of July holiday, the markets will be closely attuned to remarks from Federal Reserve policymakers.

 

GBP/USD for Thursday, July 3, 2014

GBP/USD July 3 at 15:45 GMT

GBP/USD 1.7144 H: 1.7164 L: 1.7104

 

GBP/USD Technical

S3 S2 S1 R1 R2 R3
1.6825 1.6920 1.7000 1.7183 1.7228 1.7383

 

Further levels in both directions:

 

OANDA’s Open Positions Ratio

GBP/USD is pointing to gains in short positions on Thursday, reversing the direction we say a day earlier. This is consistent with the movement of the pair, as the pound has posted slight losses. A strong majority of open positions in the GBP/USD ratio are short, indicative of a trader bias towards the dollar moving higher.

 

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]

Market Analyst at OANDA [5]
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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