GBP/USD – Pound Gains On Weak US Data

GBP/USD has recorded gains on Thursday, continuing the upward trend we saw a day earlier. In the North American session the pair is trading in the mid-1.68 range. On the release front, retail sales numbers were weak and Unemployment Claims were well above the estimate. In the UK, it’s quiet day with no economic releases on the calendar. Later in the day, BOE Governor Mark Carney will deliver remarks at an event in London. The markets will be listening closely, looking for hints as to the timing of a widely anticipated interest rate hike.

Thursday’s key US events were a major disappointment, as retail sales and employment numbers were weak. Retail Sales came in at 0.3%, short of the estimate of 0.5%. Core Retail Sales could only muster a gain of 0.1%, shy of the forecast of 0.4%. Unemployment Claims, one of the most important economic indicators, rose to 317 thousand, missing market expectations of 306 thousand. The pound took advantage of the weak US numbers, pushing above the 1.68 line and touching a three-week high against the greenback.

British employment numbers looked sharp on Wednesday. Claimant Count Change improved to -27.4 thousand, beating the estimate of -25.0 thousand. As well, the Unemployment Rate dropped to 6.6%, edging below the estimate of 6.7%. This marked the lowest rate since January 2009, further proof that the recovery is gaining speed.  Earlier in the week, Manufacturing Production, a key release, posted a strong gain of 0.4%, matching the forecast. The NIESR GDP estimate, which helps analysts track GDP on a monthly basis, posted another strong gain, coming in at 0.9%. The BOE continues to insist that a rate hike is not in the cards before 2015, but Governor Carney will face growing pressure to make a move if growth improves and unemployment continues to decline.

GBP/USD for Thursday, June 12, 2014

GBP/USD June 12 at 15:30 GMT

GBP/USD 1.6752 H: 1.6860 L: 1.6790

GBP/USD Technical

• GBP/USD has posted gains on Thursday. The pair pushed above the 1.68 line late in the Asian session.
• 1.6825 is the next resistance line.
• The round number of 1.6700 is providing support. Next, there is support at 1.6605, protecting the 1.65 level.
• Current range: 1.6700 to 1.6825.

Further levels in both directions:

• Below: 1.6705, 16605, 1.6463 and 1.6286
• Above: 1.6825, 16920, 1.70 and 1.7192

OANDA’s Open Positions Ratio

GBP/USD is almost unchanged in Thursday trading. This is not consistent with the movement of the pair, as the pound has posted gains against the dollar. A majority of the positions in the GBP/USD ratio are short, indicative of a trader bias towards the dollar changing directions and moving higher.

GBP/USD has posted gains on Thursday. The pair has edged higher in the North American session.

GBP/USD Fundamentals

• 12:30 US Core Retail Sales. Estimate 0.4%. Actual 0.1%. 
• 12:30 US Retail Sales. Estimate 0.5%. Actual 0.3%.
• 12:30 US Unemployment Claims. Estimate 306K. Actual 317K.
• 12:30 US Import Prices. Estimate 0.2%. Actual 0.1%.
• 14:00 US Business Inventories. Estimate 0.4%. Actual 0.6%.
• 14:30 US Natural Gas Storage. Estimate 111B. Actual 107B.
• 17:01 US 30-year Bond Auction.
• 18:00 Chancellor of the Exchequer George Osborne Speaks.
• 20:00 BOE Gov Carney Mark Carney Speaks.

*Key releases are highlighted in bold

*All release times are GMT

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