GBP/USD – Pound Posts Gains to Start Off Week

GBP/USD has moved upwards on Monday. In the European session, the pair is trading in the low-1.56 range. It’s a quiet start to the week, with just two minor releases on the calendar. In the UK, the BOE release its Quarterly Bulletin. The US released the Labor Market Conditions Index, a new economic indicator which the Federal Reserve introduced in October. The indicator fell to 2.9 points in November.

US employment data looked superb on Friday, as Nonfarm Payrolls shot up to 321 thousand in November, stunning the markets which had expected a rise of 231 thousand. There was also a rise in wages, which translate into stronger inflation numbers. The unemployment rate held steady at 5.8%, matching the forecast. The excellent Nonfarm Payrolls should help allay concerns about whether the economy can weather an expected rate increase in 2015.

In the UK, there were no surprises from the BOE on Thursday. The benchmark interest rate remained unchanged at 0.50%, where it has been pegged since March 2009. Although the UK economy has shown improvement, inflation remains well below the 2% target and weak Eurozone and global demand has taken its toll on the economy and reduced pressure to raise rates. Quantitative easing remains at 375 billion pounds, unchanged since July 2012.

GBP/USD for Monday, December 8, 2014

GBP/USD December 8 at 15:55 GMT

GBP/USD 1.5624 H: 1.5641 L: 1.5541

 

GBP/USD Technical

S3 S2 S1 R1 R2 R3
1.5282 1.5392 1.5505 1.5644 1.5717 1.5864

 

  • GBP/USD edged lower in Asian trade. The pair recovered and posted sharp gains in European trade. The pair has edged upwards early in the North American session.
  • 1.5644 is a weak resistance line. 1.5717 is stronger.
  • 1.5505 is providing strong support.
  • Current range: 1.5505 to 1.5644

Further levels in both directions:

  • Below: 1.5505, 1.5392, 1.5282 and 1.5165
  • Above: 1.5644, 1.5717, 1.5864, 1.6000 and 1.6141

 

OANDA’s Open Positions Ratio

GBP/USD ratio is almost unchanged on Monday. 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 move upwards.

GBP/USD Fundamentals

  • 00:01 BOE Quarterly Report Bulletin.
  • 15:00 US Labor Markets Conditions Index. Actual 2.9 points.

*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.