GBP/USD is steady on Monday as the pair trades slightly below the 1.70 line in the North American session. The pound has been struggling, having given up about 150 points in little over a week. In economic news, US Pending House Sales were dismal, posting a decline of 1.1%. There are no British releases on Monday.
US housing numbers were dismal on Monday. Pending Home Sales came in at -1.1% in June, the worst reading we’ve seen in 2014 from the key housing indicator. The reading was much worse than anticipated, as the estimate stood at -0.2%. Housing numbers were all over the map last week, as Existing Home Sales exceeded expectations, while New Home Sales softened last month.
US releases ended last week on a high note, courtesy of strong data from the manufacturing sector. Core Durable Goods Orders jumped 0.8%, beating the estimate of 0.6%, and rebounding nicely from a decline of 0.1% in May. Durable Goods Orders followed suit, posting a gain of 0.7%, compared to a weak reading of -1.0% last month. This easily surpassed the estimate of 0.4%. Unemployment Claims tumbled last week, as the key indicator fell to 284 thousand, its lowest level since February 2008. This surprised the markets, which had expected a reading of 310 thousand. The strong release continues a string of solid employment data, which has helped the dollar. As well, positive news on the employment front is bound to increase speculation about a rate increase by the Federal Reserve.
British GDP, one of the most important economic indicators, has proven to be steady and reliable. The key indicator was true to form last week, posting a healthy gain of 0.8% in Q1. This figure matched the forecast as well as the Q4 reading. Earlier in the week, consumer spending indicators sent mixed signals. British Retail Sales improved to 0.1% in June, compared to -0.5% in the previous release. This was shy of the estimate of 0.2%. On a brighter note, CBI Realized Sales, which tends to show sharp movement, jumped to 21 points, compared to a previous reading of just 4 points. The estimate stood at 18 points, and was the indicator’s best showing since March. Despite this week’s encouraging numbers, the pound continues to struggle as it trades at four-week lows against the US dollar.
GBP/USD for Monday, July 28, 2014
GBP/USD July 28 at 15:25 GMT
GBP/USD 1.6989 H: 1.7001 L: 1.6972
- GBP/USD was flat in the Asian session, The pair edged higher in the European trading and briefly broke above the 1.70 level late in the session. The pair is unchanged in North American trading.
- 1.6920 continues to provide support to the pair.
- On the upside, 1.7000 is fluid. Will the pair again break above this key level? 1.7183 is stronger.
- Current range: 1.6920 to 1.7000.
Further levels in both directions:
- Below: 1.6920, 1.6825, 1.6700 and 1.6556
- Above: 1.7000, 1.7183, 1.7228 and 1.7383
OANDA’s Open Positions Ratio
GBP/USD is pointing to gains in long positions in Monday trade, continuing the trend we saw for most of last week. This is consistent with the movement of the pair, as the pound has made small gains. A substantial majority of open positions in the GBP/USD ratio are short, indicative of a trader bias towards the dollar moving higher.
- 13:45 US Flash Services PMI. Estimate 62.3 points. Actual 61.0 points.
- 12:30 US Pending Home Sales. Estimate -0.2%. Actual -1.1%.
* Key releases are highlighted in bold
*All release times are GMT