The British pound is steady on Monday, following losses of almost 200 points on Friday. In Monday’s North American session, GBP/USD is trading at the 1.60 line, an psychologically important barrier. It’s a light trading day, with no major releases in either the UK or US on Monday.
The US dollar was broadly stronger last week, and had notable success against the shrinking British pound. GBP/USD slid close to 300 points and dipped below the 1.60 line. The pound lost 200 points on Friday alone, following excellent US job data and a soft UK Services PMI.
US employment data sparkled on Friday. Nonfarm Employment change rebounded in September, climbing to 248 thousand. This exceeded expectations of 216 thousand. The unemployment rate dipped to 5.9%, the first time it’s been below the 6% threshold in over six years. With QE slated to end later this month, the focus will shift to the timetable for an interest rake hike. Strong job numbers such as these could put pressure on the Fed to make an interest rate move sooner rather than later.
On Friday, UK Services PMI dropped to 58.7 points, down from 60.5 points a month earlier. This marked a 3-month low for the index. British PMIs were a mix last week, underscoring concern that the UK economy is slowing down, so an anticipated rate hike may have to be put on hold. It’s the opposite story in the US, where strong numbers, notably employment data, has fuelled expectations that the Federal Reserve may raise rates earlier than expected.
GBP/USD for Monday, October 6, 2014
GBP/USD October 6 at 15:00 GMT
GBP/USD 1.6003 H: 1.6157 L: 1.6003
- GBP/USD was uneventful in the Asian session and edged higher in European trade. The pair has broken above resistance in the North American session.
- The round number of 1.6000 has reverted to a support level as the pound makes gains, but this line remains fluid. 1.5864 is stronger.
- 1.6141 is an immediate resistance line. 1.6263 is stronger.
- Current range: 1.6000 to 1.6141.
Further levels in both directions:
- Below: 1.6000, 1.5864, 1.5717 and 1.5644
- Above: 1.6141, 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 Monday. This is consistent with the pair’s movement, as the pound has posted slight gains. The pair has a majority of long positions, indicative of trader bias towards the pound continuing to move higher.
- There are no UK or US releases on Monday.
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.