GBP/USD – Pound Shrugs off Dismal Retail Sales Growth Report

The pound has posted gains on Monday, as GBP/USD is trading in the mid-1.54 range in the North American session. In the UK, CBI Realized Sales plunged to 1 point, well off the estimate of 42 points.

CBI Realized Sales plummeted in February, coming in at just 1 point, compared to 39 points a month earlier. This marked the indicator’s weakest reading since June 2012. The markets had expected another strong reading of 42 points. The pound managed to move higher despite the dismal reading. Last week, employment numbers for December were excellent. Claimant Count Change came in at -38.6 thousand, while the unemployment rate dropped to 5.6%.

US releases started the week on a sour note, as Existing Home Sales slipped to 4.82 million in January, well off the estimate of 5.03 million. This marked a 9-month low for the key indicator. We’ll get a look at New Home Sales on Wednesday. Late last week, US key numbers were mixed. Unemployment Claims rebounded strongly with a sharp drop of 283 thousand, compared to 304 thousand a week earlier. This easily beat the estimate of 293 thousand. The news was not as good from the Philly Fed Manufacturing Index, which slipped to 5.2 points, down from 5.3 points and a third straight drop. The markets had expected a reading of 8.8 points.

GBP/USD for Monday, February 23, 2015

GBP/USD February 23 at 16:45 GMT

GBP/USD 1.5464 H: 1.5473 L: 1.5332

 

GBP/USD Technical

S3 S2 S1 R1 R2 R3
1.5165 1.5282 1.5392 1.5505 1.5642 1.5786

 

  • GBP/USD was flat in the Asian session. The pair lost ground early in European trade but then rebounded. The pair continues to post gains in the North American session and has broken above resistance at 1.5392.
  • 1.5392 has switched to a support role as the pair trades at higher levels. 1.5282 is stronger.
  • 1.5505 is an immediate resistance line.
  • Current range: 1.5392 to 1.5505

Further levels in both directions:

  • Below: 1.5392, 1.5282, 1.5165, 1.5008 and 1.4873
  • Above: 1.5505, 1.5642, 1.5786 and 1.5888

 

OANDA’s Open Positions Ratio

GBP/USD ratio is pointing to gains in short positions on Monday. This is not consistent with the pair’s movement, as the pound has posted gains. The ratio has a majority of long positions, indicative of trader bias towards the pound continuing to move higher.

GBP/USD Fundamentals

  • 11:00 British CBI Realized Sales. Estimate 42 points. Actual 1 point.
  • 15:00 US Existing Home Sales. Estimate 5.03M. Actual 4.82M.

*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.