GBP/USD – Limited Movement as UK Trade Balance Meets Expectations

GBP/USD is steady on Wednesday, as the pair is trading just below the 1.57 line in the North American session. On the release front, the UK posted a trade deficit of GBP 9.6 billion, very close to the forecast. In the US, Crude Oil Inventories improved sharply to 1.5 million, easily beating expectations.

The UK continues to post trade deficits, but the October reading improved slightly, with the deficit narrowing to GBP 9.6 billion, just above the estimate of GBP 9.5 billion. On Tuesday, Manufacturing Production surprised with a decline of 0.7% in October, well short of the forecast of 0.2%. This was the key indicator’s worst showing since May. The manufacturing sector continues to point downwards, hampered by weak demand from a depressed Eurozone economy. Meanwhile, NIESR GDP Estimate, which helps track GDP, remained steady at 0.7% for a third straight month.

US employment data has rebounded in impressive fashion and the good news continued on Tuesday, as JOLTS Job Openings climbed to 4.83 million, up from 4.74 million a month earlier. This beat the estimate of 4.81 million. On Friday, 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 should 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.

GBP/USD for Wednesday, December 10, 2014

GBP/USD December 10 at 16:40 GMT

GBP/USD 1.5696 H: 1.5719 L: 1.5648

 

GBP/USD Technical

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

 

  • GBP/USD has show limited movement during the day. In the North American session, the pair is testing resistance at 1.5717.
  • 1.5717 is a weak resistance line. 1.5864 is stronger.
  • 1.5644 is an immediate support level. 1.5505 is next.
  • Current range: 1.5644 to 1.5717

Further levels in both directions:

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

 

OANDA’s Open Positions Ratio

GBP/USD ratio is unchanged on Wednesday. This is consistent with the movement of the pair, as the pound is unchanged on the day. The ratio remains split between long and short positions, indicative of a lack of trader bias as to what direction the pound will take next.

GBP/USD Fundamentals

  • 9:30 British Trade Balance. Estimate -9.5B. Actual -9.6B.
  • 15:30 US Crude Oil Inventories. Estimate -2.6M. Actual 1.5M.
  • 16:15 BOC Senior Deputy Governor Carolyn Wilkins Speaks.
  • 18:01 US 10-year Bond Auction.
  • 19:00 US Federal Budget Balance. Estimate -68.3B.

*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.