GBP/USD – Pound Holds Own as US Unemployment Claims Jumps

The British pound has posted small gains on Wednesday, as GBP/USD trades in the high-1.55 range in North American session. On the release front, the US released the final events of 2014, with mixed results. Unemployment Claims was weaker than expected, jumping to 298 thousand last week. Pending Home Sales posted a gain of 0.8%, while Chicago PMI dipped to 58.3 points. The only British event of the day, Housing Equity Withdrawal, came in at -10.9 billion pounds, missing expectations.

US releases have wrapped up 2014 with mixed results. Unemployment Claims surprised with a sharp rise, coming in at 298 thousand, compared with 280 thousand in the previous reading. The estimate stood at 287 thousand. On the housing front, Pending Home Sales bounced back from a decline in the previous reading, posting a gain of 0.8% in December. This beat the forecast of 0.6%. The news was not as good from Chicago PMI, which dropped to 58.3 points, its worst showing since June. The reading fell short of the estimate of 60.2 points.

With the US economy showing better numbers as we head into 2015, the US consumer is showing more optimism about the economy. On Tuesday, CB Consumer Confidence rose to 92.6 points, up from 88.8 points a month earlier. Although this missed the estimate of 94.6, this was a solid reading which follows last week’s UoM Consumer Sentiment report. That indicator has been on an upward swing and hit 93.6 points in December, its highest level since February 2007. Consumer confidence numbers are closely watched by analysts, as increased confidence should translate into more spending by consumers, creating more jobs and strengthening economic activity.

GBP/USD for Wednesday, December 31, 2014

GBP/USD December 31 at 16:30 GMT

GBP/USD 1.5584 H: 1.5619 L: 1.5550

GBP/USD Technical

• GBP/USD was uneventful in the Asian session. The pair touched a high of 1.5619 in the European session but was unable to consolidate at this level. GBP/USD is stable in the North American session.
• 1.5644 is the next resistance line.
• On the downside, 1.5505 is an immediate support line.
• Current range: 1.5505 to 1.5644

Further levels in both directions:

• Below: 1.5505, 1.5392, 1.5282 and 1.5165
• Above: 1.5644, 1.5717, 1.5864, 1.6000 and 1.6141

OANDA’s Open Positions Ratio

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

GBP/USD Fundamentals

• 9:30 British Housing Equity Withdrawal. Estimate -9.2B. Actual -10.9B.
• 14:00 US S&P/CS Composite-20 HPI. Estimate 4.4%. Actual 4.5%.
• 13:30 US Unemployment Claims. Estimate 287K. Actual 298K.
• 14:45 US Chicago PMI. Estimate 60.2 points. Actual 58.3 points.
• 15:00 US Pending Home Sales. Estimate 0.6%. Actual 0.8%.
• 15:30 US Crude Oil Inventories. Estimate 0.2M. Actual -1.8M.
• 17:00 US Natural Gas Storage. Estimate -37B.

*Key releases are highlighted in bold

*All release times are GMT

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