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GBP/USD – Calm Ahead of Fed Policy Statement

GBP/USD has shown limited activity on Wednesday, as the pair trades in the mid-1.61 range in North American trade. In economic news, British Net Lending to Individuals met expectations, and BOE Chief Economist Andy Haldane will speak in Birmingham. In the US, all eyes are on the Federal Reserve, which will issue a policy statement and is widely expected to wind up its QE program.

The Federal Reserve will be in the spotlight on Wednesday as the US central bank releases its monthly statement. It is widely expected that the Fed will wind up its stimulus scheme, which has been in place since September 2012. Such a symbolic step would mark a vote of confidence in the economy from the powerful Fed. The markets will also be looking for hints regarding the timing of a rate hike, which is expected sometime in 2015. The Fed has noted its concern about the lack of growth in Europe, and a slowdown in China could put a rate hike on hold. Traders should treat the FOMC policy statement as a market-mover which could have a significant impact on the currency markets.

Despite a strong US recovery, durable goods data continues to point to weakness in the manufacturing sector. In September, 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 the indicator’s 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.


GBP/USD for Wednesday, October 29, 2014

GBP/USD October 29 at 16:10 GMT

GBP/USD 1.6141 H: 1.6163 L: 1.6103


GBP/USD Technical

S3 S2 S1 R1 R2 R3
1.5864 1.6000 1.6141 1.6263 1.6382 1.6524


Further levels in both directions:


OANDA’s Open Positions Ratio

GBP/USD ratio is unchanged on Wednesday. This is consistent with GBP/USD, which is unchanged on the day. The ratio has a slight majority of long positions, indicative of trader bias towards the pound breaking out and posting gains.


GBP/USD Fundamentals

* 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.

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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