GBP/USD – Pound Shrugs Off Weak Manufacturing Production Report

The pound is showing limited movement on Tuesday, as GBP/USD is trading in the mid-1.52 range. On the release front, British Manufacturing Production posted a weak gain of 0.1%. The NIESR GDP Estimate improved to 0.7%. In the US, JOLTS Jobs Openings improved to 5.03 million.

British Manufacturing Production, a key indicator, slipped to 0.1% in December, down from 0.1% a month earlier. The markets had expected a gain of 0.3%. There was no relief from British Industrial Production, which came in at -0.2%, marking a third straight decline. Meanwhile, the NIESR GDP Estimate, which helps track GDP on a monthly basis, posted a strong gain of 0.7% in the January report.

The US employment picture continues to look bright, as JOLTS Jobs Openings climbed to 5.05 million, matching expectations. This was the indicator’s highest level since 2001, and points to more available jobs due to an increase in demand for goods and services. The strong reading follows a superb US Nonfarm Payrolls report for January, which was released on Friday. The key employment indicator improved to 257 thousand in January, up from 252 thousand a month earlier. This easily beat the estimate of 236 thousand. The Federal Reserve has been clear that the employment numbers will have to be strong before a rate hike kicks in, so these strong employment releases reinforce expectations for an interest rate in mid-2015, which would be a major boost for the US dollar.

GBP/USD for Tuesday, February 10, 2015

GBP/USD February 10 at 16:15 GMT

GBP/USD 1.5239 H: 1.5267 L: 1.5221

 

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 slipped early in the European session before recovering. GBP/USD is steady in North American trade.
  • 1.5282 remains a weak resistance line. 1.5392 is stronger.
  • 1.5165 is an immediate support line.
  • Current range: 1.5165 to 1.5282

Further levels in both directions:

  • Below: 1.5165, 1.5008, 1.4873 and 1.4781
  • Above: 1.5282, 1.5392, 1.5505, 1.5642 and 1.5786

 

OANDA’s Open Positions Ratio

GBP/USD ratio is pointing to gains in short positions on Tuesday, reversing the direction seen a day earlier. This is not consistent with the pair’s movement, as GBP/USD has posted small gains. The ratio has a majority of long positions, indicative of trader bias towards the pound moving higher.

GBP/USD Fundamentals

  • 00:01 British BRC Retail Sales Monitor. Actual 0.2%.
  • 9:30 British Manufacturing Production. Estimate 0.3%. Actual 0.1%.
  • 9:30 British Industrial Production. Estimate 0.3%. Actual -0.2%.
  • 13:20 US FOMC Member Jeffrey Lacker Speaks.
  • 14:00 US NFIB Small Business Index. Estimate 101.3 points. Actual 97.9 points.
  • 14:35 British NIESR GDP Estimate. Actual 0.7%.
  • 15:00 US JOLTS Openings. Estimate 5.03M. Actual 5.03M.
  • 15:00 US IBD/TIPP Economic Optimism. Estimate 51.4 points. Actual 47.5 points.
  • 15:00 US Wholesale Inventories. Estimate 0.2%. Actual 0.1%.

*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.