GBP/USD – Limited Movement Ahead of Key US Reports

The pound has stabilized on Friday, as GBP/USD trades at the 1.54 line in the European session. On the release front, the US will issue its second estimate of GDP for Q4, with a forecast of 2.1%. This is lower than the initial estimate of 2.6% in January. We’ll also get a look at Revised UoM Consumer Sentiment and Pending Home Sales. There are no UK releases on Friday.

Thursday’s US inflation and job numbers were not impressive. US inflation indicators continue to struggle. CPI posted a third straight decline, coming in at -0.7%. This was very close to the forecast of -0.6%. Core CPI improved to 0.2%, edging above the estimate of 0.1%. On the employment front, there was disappointing news, as Unemployment Claims jumped to a 6-week high, coming in at 313 thousand. This was much higher than the estimate of 288 thousand.

Janet Yellen testified before Congressional committees on Tuesday and Wednesday, saying that the Fed was “unlikely” to raise interest rates in the next few months, given current economic conditions. Her remarks seemed aimed at quelling rising speculation about a rate hike sometime in mid-2015, which has helped boost the US dollar’s performance against its major rivals. Yellen noted that the continuing economic growth should lead to unemployment continuing to fall, but wages and inflation need to move higher before the Fed raises interest rates.

GBP/USD for Friday, February 27, 2015

GBP/USD February 27 at 11:10 GMT

GBP/USD 1.5402 H: 1.5448 L: 1.5384

 

GBP/USD Technical

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

 

  • GBP/USD moved higher in the Asian session but has given up these gains in European trade.
  • On the downside, 1.5392 remains under strong pressure. Will the pair break below this line? 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 long positions on Friday. This is not consistent with the lack of movement we’re seeing from the pair. The ratio has a majority of long positions, indicative of trader bias towards the pound moving higher.

GBP/USD Fundamentals

  • 13:30 US Preliminary GDP. Estimate 2.1%.
  • 13:30 US Preliminary GDP Price Index. Estimate 0.0%.
  • 14:45 US Chicago PMI. Estimate 58.4 points.
  • 15:00 US Pending Home Sales. Estimate 2.5%.
  • 15:00 US Revised UoM Consumer Sentiment. Estimate 94.2 points.
  • 15:00 US Revised UoM Inflation Expectations.
  • 15:15 US FOMC Member William Dudley Speaks.
  • 18:30 US FOMC Member Stanley Fischer Speaks.

*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.