GBP/USD – Pound Stops Slide as BOE Holds Steady Course

The pound has reversed its week long slide, as the currency has held its own against the US dollar in Thursday trading. In the North American session, GBP is trading just above the 1.51 line. As widely expected, the BOE held its benchmark interest rate at 0.50% and QE levels at 375 billion pounds. British Halifax HPI was unexpectedly strong, posting a gain of 0.9%. In the US, Unemployment Claims dropped to 294 thousand, slightly above the estimate. This figure was within expectations, as the estimate stood at 291 thousand.

US employment data will be in the spotlight on Thursday and Friday. Earlier on Thursday, Unemployment Claims came in at 294 thousand, down from 298 a week earlier. This figure was within expectations, as the estimate stood at 291 thousand. On Friday, we’ll get a look at the all-important Nonfarm Payrolls as well as the unemployment rate.

The Federal Reserve released the minutes of its previous meeting on Wednesday, with no surprises to shake up the markets. There had been a lot of speculation that the insertion of the word “patience” in the December policy statement signaled a more aggressive monetary stance on the part of the Fed. However, the minutes stated that Fed members remained of the view that monetary policy had not changed, and that a rate hike would not occur before April. The markets are expecting a rate hike sometimes in 2015, but it’s hard to be any more precise. Although economic growth continues to improve, inflation remains at very low levels, which means that the economy is in no danger of overheating, so there is no immediate need for a rate increase.

GBP/USD for Thursday, January 8, 2015

GBP/USD January 8 at 16:30 GMT

GBP/USD 1.5110 H: 1.5117 L: 1.5034

GBP/USD Technical

• GBP/USD showed limited movement in the Asian and European sessions. The pound has edged higher in the North American session.
• 1.5165 is a weak resistance line. 1.5282 is stronger.
• 1.5008 is a strong support line, protecting the key 1.50 level.
• Current range: 1.5008 to 1.5165

Further levels in both directions:

• Below: 1.5008, 14873, 1.4781 and 1.4670
• Above: 1.5165, 1.5282, 1.5392, 1.5505 and 1.5644

OANDA’s Open Positions Ratio

GBP/USD ratio is pointing to gains in short positions on Thursday, reversing the direction seen a day earlier. This is not consistent with the pair’s movement, which is little changed on the day. The ratio has a majority of long positions, indicative of trader bias towards the pair moving upwards.

GBP/USD Fundamentals

• 8:00 British Halifax HPI. Estimate 0.3%. Actual 0.9%.
• 12:00 BOE Official Bank Rate. Estimate 0.50%. Actual 0.50%.
• 12:00 BOE Asset Purchase Facility. Estimate 375B. Actual 375B.
• 12:30 US Challenger Job Cuts. Actual 6.6%.
• 13:30 US Unemployment Claims. Estimate 291K. Actual 294K.
• 15:30 US Natural Gas Storage. Estimate -120B. Actual -131B.
• 20:00 US Consumer Credit. Estimate 15.1B.

*Key releases are highlighted in bold

*All release times are GMT

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