GBP/USD – Slight Gains on Mixed US Numbers

GBP/USD has posted slight gains, as the pair trades in the mid-1.61 range on Tuesday. On the release front, US key numbers were mixed. Core Durable Goods Orders looked weak, posting a decline of 0.2%. On a brighter note, CB Consumer Confidence sparkled, jumping to 94.5 points in September. There are no British releases on Tuesday.

In the US, durable goods looked dismal. Core Durable Goods Orders dropped 0.2%, its second decline in three months. This was well short of the estimate of 0.5%. Durable Goods Orders followed suit with a decline of -1.3%. This was a second straight decline, and missed the estimate of 0.4%. There was much better news from CB Consumer Confidence, as the indicator climbed to 94.5 points, up sharply from 86.0 points. The easily beat the estimate of 87.4 and marked a 7-year high.

The Federal Reserve will be at center stage on Wednesday, as a two-day meeting wraps up with the release of a policy statement. The Fed is expected to wind up QE, and if policymakers delay this move, the dollar will likely take a hit against its major rivals. The markets will also be looking for hints regarding the timing of a rate hike, which is expected sometime in 2015. Traders should treat this release as a market-mover which could have a significant impact on the currency markets.

In the UK, British Retail Sales retail sales volumes continue to look strong, as CBI Realized Sales came in at 31 points for a second straight month. This was slightly ahead of the estimate of 29 points. Last week, British Preliminary GDP, one of the most important economic indicators, dipped to 0.7% in Q3, down from 0.9% in the previous quarter. This figure matched the forecast, so there was little reaction from the pound. We’ll get a look at Net Lending to Individuals on Wednesday.

GBP/USD for Tuesday, October 28, 2014

GBP/USD October 28 at 15:40 GMT

GBP/USD 1.6164 H: 1.6182 L: 1.6088

GBP/USD Technical

• GBP/USD showed little movement until late in the Asian session, when the pair showed strong gains and broke above resistance at 1.6141. The pair is steady in North American trade.
• 1.6141 was breached earlier and has reverted to a support line. It is a weak line and could see further action during the day. 1.6000 is stronger.
• 1.6263 is a strong resistance line.
• Current range: 1.6141 to 1.6263

Further levels in both directions:

• Below: 1.6141, 1.6000, 1.5864, 1.5717 and 1.5644
• Above 1.6263, 1.6382, 1.6524 and 1.6643

OANDA’s Open Positions Ratio

GBP/USD ratio is pointing to gains in short positions on Tuesday. This is not consistent with the movement of GBP/USD, which has shown slight gains on the day. The ratio has a slight majority of long positions, indicative of trader bias towards the pound continuing to move upwards.

GBP/USD Fundamentals

• 12:30 US Core Durable Goods Orders. Estimate +0.5%. Actual -0.2%.
• 12:30 US Durable Goods Orders. Estimate +0.4%. Actual -1.3%.
• 13:00 S&P/CS Composite-20 HPI. Estimate 5.7%. Actual 5.6%.
• 14:00 US Richmond Manufacturing Index. Estimate 11 points. Actual 20 points.
• 14:00 US CB Consumer Confidence. Estimate 87.4 points. Actual 94.5 points.

* Key releases are in highlighted 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.