GBP/USD – Pound Climbs as US Jobless Claims, Trade Balance Disappoint

The pound rally continues in high gear, as GBP/USD has gained over 100 points on Thursday. In the North American session, GBP/USD is trading just shy of the 1.53 line. On the release front, British Halifax HPI impressed with a strong gain of 2.0%. As expected, the BOE did not make any changes to QE or interest rate levels. In the US, In the US, key data disappointed. Unemployment Claims rose last week to 278 thousand and Trade Balance missed expectations, coming in at $-46.6 billion.

In the US, Unemployment Claims rose to 278 thousand, up from 265 thousand in the previous release. Still, the reading beat the forecast of 287 thousand. On Wednesday, ADP Nonfarm Employment Change was well off expectations, falling to 213 thousand. The estimate stood at 224 thousand. Meanwhile, the trade deficit ballooned to $46.6 billion, compared to $39.0 billion a month earlier. This marked the largest trade deficit since May.

British PMIs completed a sweep on Wednesday, as Construction PMI jumped to 57.2 points, up from 55.8 a month earlier. This beat the forecast of 56.6 points. Construction PMI followed positive readings from the Services and Manufacturing PMIs earlier in the week. It’s been a banner week for the pound, which has gained close to 300 points against the US dollar.

GBP/USD for Thursday, February 5, 2015

GBP/USD February 5 at 16:30 GMT

GBP/USD 1.5293 H: 1.5314 L: 1.5168

GBP/USD Technical

• GBP/USD showed little movement in the Asian session. The pair posted gains in the European session. GBP/USD continues to climb in North American trade and has broken above resistance at 1.5282.
• 1.5282 has reverted to a support level as the pound has posted strong gains. It is a weak line and could see more action in the North American session. 1.5165 is stronger.
• 1.5392 is a strong resistance line.
• Current range: 1.5282 to 1.5392

Further levels in both directions:

• Below: 1.5282, 1.5165, 1.5008, 1.4873 and 1.4781
• Above: 1.5392, 1.5505, 1.5642 and 1.5786

OANDA’s Open Positions Ratio

GBP/USD ratio is almost unchanged on Thursday. This is not consistent with the pair’s movement, as GBP/USD has posted strong gains. The ratio is close to a split between long and short positions, indicative of a lack of trader bias as to which direction the pair will take next.

GBP/USD Fundamentals

• 9:30 British Halifax HPI. Estimate 0.1%. Actual 2.0%.
• 12:00 British Official Bank Rate. Estimate 0.50%. Actual 0.50%.
• 12:00 British Asset Purchase Facility. Estimate 375B. Actual 375B.
• 12:30 US Challenger Job Cuts. Actual 17.6%.
• 13:30 US Trade Balance. Estimate -38.2B. Actual -46.6B.
• 13:30 US Unemployment Claims. Estimate 287K. Actual 278K.
• 13:30 US Preliminary Nonfarm Productivity. Estimate 0.3%. Actual -1.8%.
• 13:30 US Preliminary Unit Labor Costs. Estimate 1.3%. Actual 2.7%.
• 15:30 US Natural Gas Storage. Estimate -119B. Actual -115B.

*Key releases are highlighted in bold

*All release times are GMT

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