GBP/USD – Little Change As Pound Remains Above 1.61

GBP/USD is showing little movement in Monday trading, as the pair trades around the 1.61 line. On Sunday, British Rightmove HPI disappointed, posting its third decline in four releases. There are no British releases on Monday. In the US, NAHB Housing Market Index dropped  slightly and missed the estimate.

The UK economy continues to improve at an impressive clip, and this was confirmed in an OECD report on Monday. The report found that the world’s advanced economies grew 0.5% in Q3, with the UK leading the way with growth of 0.8%. The US followed with 0.7% growth, and Japan posted a gain of 0.5%. This was in sharp contrast to the Eurozone, which continues to experience weak growth. Germany, the locomotive of the region, posted 0.3% growth, while Italy and France both showed declines of 0.1%.

Unemployment Claims have been fairly steady over the past few weeks, but with speculation increasing about a possible December taper by the Federal Reserve, every employment release is under the market’s microscope. On Thursday, the key indicator showed little change with a reading of 339 thousand, but this was above the estimate of 331 thousand. There wasn’t any relief from Thursday’s other key release, Trade Balance. The October deficit widened to -$41.8 billion, compared to -$38.8 billion in September. This was well above the estimate of -$38.7 billion.

Late last week, Federal Reserve chair-elect Janet Yellen testified before the powerful Senate Banking Committee. Yellen has been an ardent supporter of QE, and told the committee that the present level of asset purchases should continue until growth improves and unemployment falls. She said that the labor market and economy are performing “far short of their potential”, but added that she expects inflation to remain below the Fed’s target of 2%. Yellen, who is slated to become the first woman to head the Federal Reserve, will take over from Bernard Bernanke in January.

GBP/USD for Monday, November 18, 2013

GBP/USD November 18 at 16:20 GMT

GBP/USD 1.6102 H: 1.6149 L: 1.6094

GBP/USD Technical

• GBP/USD is showing little movement in Monday trading. The pair has dipped below the 1.61 line in the European and North American sessions.
• 1.6000 continues to provide support. This line has strengthened as the pair trades close to the 1.61 level. This is followed by support at 1.5877.
• On the upside, 1.6125 is providing weak resistance. This line is followed by resistance at 1.6231, which was last tested in late October.
• Current range: 1.6000 to 1.6125.

Further levels in both directions:

• Below: 1.6000, 1.5877, 1.5756 and 1.5645 and 1.5537
• Above: 1.6125, 1.6231, 1.6300 and 1.6476

OANDA’s Open Positions Ratio

GBP/USD ratio is almost unchanged in Monday trading. This is reflected in the current movement of the pair, which is showing very little movement. Short positions continue to dominate the open positions, reflecting a trader bias towards the US dollar moving to higher ground.

The pound continues to move higher against the US dollar. With no major US releases on Monday, movement by GBP/USD in the North American session could be limited in scope.

GBP/USD Fundamentals

• 6:00 FOMC Member Eric Rosengren Speaks.
• 14:00 US TIC Long-Term Purchases. Estimate 21.3B.
• 15:00 US NAHB Housing Market Index. Estimate 56 points.
• 17:15 FOMC Member William Dudley 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.