GBP/USD – Pound Strengthens on Solid Services PMI

GBP/USD has posted gains on Wednesday, as the pair trades just above the 1.56 line. On the release front, British Services PMI climbed to 58.6 points. As well, Chancellor of the Exchequer George Osborne presented his budget statement. In the US, ADP Nonfarm Employment Change slipped to 208 thousand, well off expectations. ISM Non-Manufacturing PMI looked sharp in November, improving to 59.3 points.

British Services PMI improved to 58.6 points in November, beating the estimate of 56.6 points. This was a sharp improvement from the previous release of 56.2 points and the strong reading helped the pound post gains against the dollar. On Tuesday, Construction PMI dropped to 59.4 points, the first time it has slipped below the 60-point level since October 2013. This was well short of the estimate of 61.1 points.

US jobless claims did not impress, as ADP Nonfarm Employment Change fell to 208 thousand, down from 230 thousand in the previous release. This was well short of the estimate of 223 thousand. We’ll get a look at the official Nonfarm Employment Change report on Friday, with the markets expecting a strong reading of 231 thousand. Will the indicator meet or  beat expectations?

GBP/USD for Wednesday, December 3, 2014

GBP/USD December 3 at 16:30 GMT

GBP/USD 1.5710 H: 1.5719 L: 1.5619

 

GBP/USD Technical

S3 S2 S1 R1 R2 R3
1.5392 1.5505 1.5644 1.5717 1.5864 1.6000

 

  • GBP/USD was flat in the Asian session. The pair has posted gains in the European and North American sessions, testing resistance at 1.5710.
  • On the upside, 1.5717 is under strong pressure. 1.5864 is stronger.
  • On the downside, 1.5644 is an immediate support line. 1.5505 is next.
  • Current range: 1.5644 to 1.5717

Further levels in both directions:

  • Below: 1.5644, 1.5505, 1.5392 and 1.5282
  • Above: 1.5717, 1.5864, 1.6000, 1.6141 and 1.6263

 

OANDA’s Open Positions Ratio

GBP/USD ratio is pointing to gains in short positions on Wednesday, continuing the direction we saw a day earlier. This is not consistent with the movement of the pair, as the pound has posted gains. The ratio has a majority of long positions, indicative of trader bias towards the pound continuing to post gains.

GBP/USD Fundamentals

  • 9:30 British Services PMI. Estimate 56.6 points. Actual 58.6 points.
  • 12:30 British Autumn Forecast Statement.
  • 13:10 US FOMC Member Stanley Fischer Speaks.
  • 13:30 US Federal Reserve Chair Janet Yellen Speaks.
  • 15:00 US Construction Spending. Estimate 0.6%. Actual 1.1%.
  • All Day – US Total Vehicle Sales. Estimate 16.6M. Actual -3.7M.
  • 17:00 US FOMC Member Lael Brainard Speaks.

*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

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.