GBP/USD – Slight Losses on Strong US Employment, Retail Sales Data

GBP/USD has posted slight losses on Thursday, as the pair trades just above the 1.57 line in the North American session. On the release front, there was positive news from the US, as all three key events beat expectations. Core Retail Sales posted a 0.5% gain, while Retail Sales climbed 0.7%. Unemployment Claims impressed, dipping to 294 thousand. In the UK, today’s sole release was RICS House Price Balance. The minor indicator missed expectations.

US retail sales reports, the primary gauge of consumer spending, looked sharp in November. Core Retail Sales came in at 0.5%, ahead of the estimate of 0.1%. Not to be undone, Retail Sales posted a gain of 0.7%, beating the estimate of 0.4%. This was the indicator’s strongest showing in 12 months. There was more good news on the job front, as Unemployment Claims dipped to 294 thousand, below the forecast of 299 thousand. On Friday, the US will release PPI and UoM Consumer Sentiment, so we could see some movement from GBP/USD following these key events.

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.

GBP/USD for Thursday, December 11, 2014

GBP/USD December 11 at 16:05 GMT

GBP/USD 1.5707 H: 1.5757 L: 1.5652

 

GBP/USD Technical

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

 

  • GBP/USD tested resistance at 1.5717 in the Asian session before retracting. The pair lost ground in the European session but has reversed directions in North American trade.
  • On the upside, 1.5717 is under strong pressure. 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 pointing to gains in long positions on Thursday. This is not consistent with the movement of the pair, as the pound has posted slight losses. The ratio remains close to a 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

  • 00:01 British RICS House Price Balance. Estimate 20%. Actual 13%.
  • 13:30 US Core Retail Sales. Estimate 0.1%. Actual 0.4%.
  • 13:30 US Retail Sales. Estimate 0.4%. Actual 0.7%.
  • 13:30 US Unemployment Claims. Estimate 299K. Actual 294K.
  • 13:30 US Import Prices. Estimate -1.7%. Actual -1.5%.
  • 15:00 US Business Inventories. Estimate 0.2%. Actual 0.2%.
  • 15:30 US Natural Gas Storage. Estimate -45B. Actual -51B.
  • 18:01 US 30-year Bond Auction.

*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.