GBP/USD – Pound Continues to Drift

The pound is showing limited movement on Wednesday, as GBP/USD is trading in the mid-1.52 range. On the release front, it was a quiet day. The sole British release, the 30-year bond auction, dipped to 2.37%. In the US, there were no major releases on the schedule. Crude Oil Inventories slipped to 4.9 million in January.

US employment numbers continue to impress, 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 solid 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.

Earlier in the week, 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.

GBP/USD for Wednesday, February 11, 2015

GBP/USD February 11 at 16:35 GMT

GBP/USD 1.5247 H: 1.5299 L: 1.5233

GBP/USD Technical

• GBP/USD has showed strong movement during the day. The pair was flat during the Asian session. GBP/USD posted gains in the European session, testing resistance at 1.5282. The pair gave up these gains in North American trade.
• 1.5282 is a weak resistance line. 1.5392 is stronger.
• 1.5165 is providing strong support.
• 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 long positions on Wednesday, reversing the direction seen a day earlier. This is not consistent with the pair’s movement, as GBP/USD has posted small losses. The ratio has a majority of long positions, indicative of trader bias towards the pound moving higher.

GBP/USD Fundamentals

• 10:35 British 30-year Bond Auction. Actual 2.37%.
• 15:30 US Crude Oil Inventories. Estimate 3.7M.
• 18:01 US 10-year Bond Auction.
• 19:00 US Federal Budget Balance. Estimate -2.6B.

*Key releases are highlighted in bold

*All release times are GMT

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