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GBP/USD – Dollar Improves on US Consumer Confidence

GBP/USD has lost ground on Tuesday, as the pair trades in the mid-1.69 range in the North American session. The sagging pound has now lost about  200 points in the past two weeks. In economic news, British Net Lending to Individuals met expectations. Over in the US, CB Consumer Confidence stunned the markets, pushing above the 90-point level for the first time since late 2007. The excellent release has helped boost the dollar at the expense of the pound.

If CB Consumer Confidence is any indication, the US consumer is brimming with optimism about the economy. The key indicator jumped to 90.9 points, crushing the estimate of 85.5 points. This was the indicator’s highest level since September 2007. Consumer confidence is closely tracked by analysts since a confident consumer is likely to increase consumption, which is critical for economic growth. Meanwhile, traders can expect stronger currency movement on Wednesday, with three key events on the calendar. The Federal Reserve will release a policy statement and we’ll get a look at Advance GDP and the ADP Nonfarm Payrolls. If these releases surprise the markets, we could see increased activity in the currency markets.

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.


GBP/USD for Tuesday, July 29, 2014

GBP/USD July 29 at 15:30 GMT

GBP/USD 1.6944 H: 1.6995 L: 1.6934


GBP/USD Technical

S3 S2 S1 R1 R2 R3
1.6700 1.6825 1.6920 1.7000 1.7183 1.7228


Further levels in both directions:


OANDA’s Open Positions Ratio

GBP/USD is pointing to gains in long positions in Tuesday trade, continuing the trend which has marked the ratio since last week. This is not consistent with the movement of the pair, as the pound has lost ground. A substantial majority of open positions in the GBP/USD ratio are short, indicative of a trader bias towards the dollar continuing to move 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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