GBP/USD – Pound Extends Gains on Strong Services PMI

The pound continues to point gains on Wednesday, as GBP/USD trades slightly above the 1.52 line in the North American session. On the release front, British Services PMI rose to 56.2 points, beating expectations. In the US, ADP Non-Farm Employment Change fell to 213 thousand, while ISM Non-Manufacturing PMI showed little change, with a reading of 56.7 points.

British PMIs completed a sweep, as Construction PMI jumped to 57.2 points, up from 55.8 a month earlier. This beat the forecast of 56.6 points. Construction PMI followed positive readings from the Services and Manufacturing PMIs earlier in the week. The pound has responded with further gains on Wednesday, and is up almost 200 points since Monday.

In the US, ADP Non-Farm Employment Change was well off expectations, falling to 213 thousand. The estimate stood at 224 thousand. The markets are bracing for more bad news, as the estimates for Unemployment Claims and the official Nonfarm Employment Change also call for weaker readings. If the forecasts prove correct that the labor market has started off 2015 on a weak note, we could see the US dollar lose ground.

GBP/USD for Wednesday, February 4, 2015

GBP/USD February 4 at 16:45 GMT

GBP/USD 1.5212 H: 1.5250 L: 1.5139

 

GBP/USD Technical

S3 S2 S1 R1 R2 R3
1.4873 1.5008 1.5165 1.5282 1.5392 1.5505

 

  • GBP/USD showed little movement in the Asian session. The pair posted gains in the European session, putting pressure on support at 1.5282. GBP/USD is unchanged in North American trade.
  • 1.5165 is an immediate support level.
  • 1.5282 is the next resistance line. It could face pressure if the pound resumes its upward move.
  • Current range: 1.5165 to 1.5282

Further levels in both directions:

  • Below: 1.5165, 1.5008, 1.4873, 1.4781 and 1.4670
  • Above: 1.5282, 1.5392, 1.5505 and 1.5642

 

OANDA’s Open Positions Ratio

GBP/USD ratio is pointing to gains in short positions on Wednesday. This is not consistent with the pair’s movement, as GBP/USD has posted gains. The ratio is close to a split between long and short positions, indicative of a lack of trader bias as to which direction the pair will take next.

GBP/USD Fundamentals

  • 9:30 British Services PMI. Estimate 57.2 points. Actual 56.6 points.
  • 13:15 US ADP Non-Farm Employment Change. Estimate 224K. Actual 213K.
  • 14:45 US Final Services PMI. Estimate 54.3 points.
  • 15:00 US ISM Non-Manufacturing PMI. Estimate 56.6 points. Actual 56.7 points.
  • 15:30 US Crude Oil Inventories. Estimate 4.0M. Actual 6.3M.

*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

Market Analyst at OANDA
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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