GBP/USD – Pound Moves Higher, Pushes Above 1.62

The British pound has posted slight gains on Thursday, as GBP/USD trades in the low-1.62 range in Thursday’s North American session. Today’s highlight was US Unemployment Claims, which disappointed the markets. The indicator rose to 315 thousand, well above expectations. In the sole British event of the day, the 30-year bond yield dipped to 3.17%. Yields continue to drop, and this figure marked a seven-month low.

US employment numbers continue to raise concern. Unemployment Claims rose to 315 thousand, the largest number of claims in 10 weeks. The reading was much higher than the estimate of 306 thousand. This follows soft numbers from JOLTS Job Openings and a dismal Nonfarm Payrolls last week. The troubling job numbers are unlikely to affect the Fed’s plan to continue trimming QE next week, but a weak labor market could postpone plans to raise interest rates by mid-2015.

British Manufacturing Production, a key event, was unchanged last month, posting another gain of 0.3%. This matched the forecast. There was positive news from the NIESR GDP Estimate, which rose to 0.6%, up from 0.5% last month. At the same time, the trade deficit rose to 10.2 billion pounds, compared to 9.4 billion last month. The markets had expected the deficit to fall to 9.1 billion.

Scotland’s future is weighing on the pound, as Scottish voters cast their ballots  in a referendum on independence on September 18th. The most recent polls are split as to whether Scotland will vote to secede from the UK. If voters do choose this option, this would create a lot of questions and uncertainty, including what currency an independent Scotland would use and how the national debt would be divided. As voting day looms closer, we are likely to see volatility from the pound.

GBP/USD for Thursday, September 11, 2014

GBP/USD September 11 at 16:00 GMT

GBP/USD 1.6227 H: 1.6271 L: 1.6186

GBP/USD Technical

• The pound was stable in the Asian session. GBP/USD moved higher in the European session, but has surrendered most of these gains in North American trade.
• 1.6141 has reverted to a support role. This line has strengthened as the pound has moved to higher levels.
• 1.6263 is an immediate resistance line.
• Current range: 1.6141 to 1.6263.

Further levels in both directions:

• Below: 1.6141, 1.6000, 1.5864, 1.5731 and 1.5628
• Above: 1.6263, 1.6382, 1.6484 and 1.6605

OANDA’s Open Positions Ratio

GBP/USD ratio is pointing to gains in long positions on Thursday, reversing the direction seen a day earlier. This is consistent with the pair’s movement, as the pound has made slight gains. The ratio has a majority of long positions, indicative of trader bias towards the pound moving higher.

GBP/USD Fundamentals

• 9:34 British 30-year Bond Auction. Actual 3.17%.
• 12:30 US Unemployment Claims. Estimate 306K. Actual 316K.
• 14:30 US Natural Gas Storage. Estimate 84B. Actual 92B.
• 17:01 US 30-year Bond Auction.
• 18:00 US Federal Budget Balance. Estimate -132B.

* Key releases are highlighted in bold

*All release times are GMT

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