GBP/USD – Pound Choppy on Soft UK Data

The British pound is choppy on Tuesday, as the pair trades in the mid-1.60 range in the Tuesday North American session. On the release front, Manufacturing Production dipped to 0.1%. The NIESR GDP Estimate edged lower in September, with a 0.7% gain. In the US, employment data remained sharp as JOLTS Job Openings jumped to 4.84 million.

British Manufacturing Production, the week’s fist key event, disappointed with a 0.1% gain, slipping from 0.3% a month earlier. This marked a 3-month low, and comes on the heels of a soft Manufacturing PMI. Is the manufacturing sector showing signs of strain? Meanwhile, NIESR GDP Estimate also weakened. The indicator dipped to 0.7%, compared to 0.8% a month earlier. This monthly release helps analysts track GDP, which is published just once each quarter. The indicator edged up to 0.7%,

US job numbers continue to impress. On Tuesday, JOLTS Job Openings climbed to 4.84 million, up from  4.67 million a month earlier. The indicator is on a strong upward trend, indicative of the US employment sector. Last week, Nonfarm Employment change rebounded in September, climbing to 248 thousand. This exceeded expectations of 216 thousand. The unemployment rate dipped to 5.9%, the first time it’s been below the 6% threshold in over six years. With QE slated to end later this month, the focus will shift to the timetable for an interest rake hike. Strong employment numbers such as these could put pressure on the Fed to make an interest rate move sooner rather than later in 2015, and increased speculation about a rate move will likely boost the dollar even further.

GBP/USD for Tuesday, October 7, 2014

GBP/USD October 7 at 16:00 GMT

GBP/USD 1.6073 H: 1.6128 L: 1.6026

GBP/USD Technical

• GBP/USD has been marked by choppy trading throughout the day, unable to sustain momentum in either direction.
• On the downside, the round number of 1.6000 has some breathing room.. 1.5864 is stronger.
• 1.6141 is the next resistance line.
• Current range: 1.6000 to 1.6141.

Further levels in both directions:

• Below: 1.6000, 1.5864, 1.5717 and 1.5644
• Above: 1.6141, 1.6263, 1.6382, 1.6484 and 1.6605

OANDA’s Open Positions Ratio

GBP/USD ratio is pointing to gains in short positions on Tuesday, reversing the direction seen a day earlier. This is not consistent with the pair’s movement, as the pound has shown almost no net movement. The pair has a majority of long positions, indicative of trader bias towards the pound moving  higher.

GBP/USD Fundamentals

• 8:30 British Housing Equity Withdrawal. Estimate -113B. Actual -10.8B.
• 8:30 British Manufacturing Production. Estimate 0.2%. Actual 0.1%.
• 8:30 BoE Credit Conditions Survey.
• 8:30 British Industrial Production. Estimate 0.2%. Actual 0.0%.
• 9:34 British 30-year Bond. Actual 3.04%.
• 13:50 British NIESR GDP Estimate. Actual 0.7%.
• 14:00 US JOLTS Job Openings. Estimate 4.71M. Actual 4.84M.
• 14:00 US IBD/TIPP Economic Optimism. Estimate 46.3 points. Actual 45.2 points.
• 17:20 US FOMC Member Narayana Kocherlakota Speaks.
• 19:00 US FOMC Member William Dudley Speaks.
• 19:00 US Consumer Credit. Estimate 20.3B.

* Key releases are in highlighted bold.

*All release times are GMT

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