GBP/USD has posted gains in the Monday session, continuing the upward trend we saw on Friday. In the North American session, the pair is trading at the 1.27 line. On the release front, British Services PMI improved to 55.2 points, beating the estimate of 54.2 points. Later in the day, the UK releases BRC Retail Sales Monitor. In the US, ISM Non-Manufacturing PMI jumped to 57.2, beating the forecast of 55.3.
The pound continues to drive higher, after posting impressive gains of 1.9 percent last week. British Services PMI climbed to 55.2 in November, indicative of a strengthening services sector. This marked its highest level since January. Last week, Manufacturing and Construction PMIs both indicated expansion in their respective sectors. Fourth quarter numbers have been respectable, as economic indicators continue to defy the doomsayers who predicted that the Brexit vote would severely hurt the economy. Still, there are rough seas ahead, as Britain must negotiate the terms of its departure from the European Union, in what could easily descend into a nasty divorce. Last week, Brexit Minister David Davis sent the markets a reassuring message, stating that Britain would consider paying for access to the European single market.
Employment numbers were on center stage on Friday, as the US released key employment indicators. In the US, the numbers were a mix. Nonfarm Payrolls improved to 178 thousand, edging above the forecast of 177 thousand. This marked a 4-month high. However, Average Hourly Earnings, which measures wage growth, surprised with a decline of 0.1%, short of the estimate of 0.2%. This was the first decline in wage growth since March. The unemployment rate dropped to just 4.6%, well below the forecast of 4.9%. The strong labor market has been a key factor in the strong US economy, which saw GDP grow at a clip of 3.2% in the third quarter.
Sunday (December 4)
- 19:01 British Shop Price Index. Actual -1.7%
Monday (December 5)
- 4:30 UK Services PMI. Estimate 54.2. Actual 55.2
- 8:30 US FOMC Member William Dudley Speech
- 9:45 US Final Services PMI. Estimate 54.9
- 10:00 US ISM Non-Manufacturing PMI. Estimate 55.3. Actual 57.2
- 10:00 US Labor Market Conditions Index. Actual 1.5
- 12:00 BoE Governor Mark Carney Speech
- 14:05 US FOMC Member James Bullard Speech
- 19:01 British BRC Retail Sales Monitor
*All release times are EST
* Key events are in bold
GBP/USD for Monday, December 5, 2016
GBP/USD December 5 at 11:05 EST
Open: 1.2669 High: 1.2774 Low: 1.2652 Close: 1.2705
- GBP/USD has posted gains in the Asian and European sessions
- 1.2620 is providing support
- 1.2778 is the next resistance line
Further levels in both directions:
- Below: 1.2620, 1.2471, 1.2351 and 1.2272
- Above: 1.2778, 1.2849 and 1.2946
- Current range: 1.2620 to 1.2778
OANDA’s Open Positions Ratio
GBP/USD ratio is unchanged in the Monday session. Currently, long positions have a majority (61%), indicative of trader bias towards GBP/USD continuing to move upwards.
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.