GBP/USD – Pound Yawns as Mfg. Order Expectations Surge

The British pound is showing limited movement in the Tuesday session. In North American trade, GBP/USD is trading at 1.3240, up 0.05% on the day. In the UK, Public Sector Net Borrowing climbed to GBP 7.5 billion, above the forecast of GBP 6.6 billion. This marked the highest deficit since April. There was much better news from CBI Industrial Order Expectations, which jumped to 17, crushing the estimate of 3 points. As well, BoE Governor Mark Carney testified about inflation before a parliamentary committee. In the US, Existing Home Sales improved to 5.48 million, beating the forecast of 5.42 million. Later in the day, Fed Chair Janet Yellen will speak at an event in New York City. Wednesday is busy, as the US releases employment, durable goods and consumer confidence reports. Also, the Federal Reserve releases the minutes of its November policy meeting. In the UK, the government will present the Autumn Forecast Statement.

There was positive news from British CBI Industrial Order Expectations, an important barometer of activity in the manufacturing sector. The indicator surged to 17 points in October, rebounding from the September release of -2 points. Manufacturing indicators continue to point upwards, boosted by strong global demand and a weak British pound. Export order books are at their highest levels since 1995, and the markets are predicting that the export and manufacturing sectors will continue to shine in the fourth quarter.

US construction numbers continue to beat expectations. On Monday, it was the turn of Existing Home Sales, which climbed to a 4-month high. On Friday, Building Permits and Housing Starts impressed the markets. Building Permits for single-family homes jumped to 1.30 million, above the estimate of 1.25 million. The annualized pace of 839,000 building permits in October was the fastest since September 2007. Housing Starts also sparkled, accelerating to 1.29 million, compared to an estimate of 1.19 million. The catalyst for the strong numbers were hurricanes Harvey and Irma, which caused massive damage in the southern part of the US. With rebuilding efforts well underway, construction numbers should remain strong in the fourth quarter.

GBP/USD Fundamentals

Tuesday (November 21)

• 4:30 British Public Sector Net Borrowing. Estimate 6.6B. Actual 7.5B
• 5:00 BoE Inflation Report Hearings
• 6:00 British CBI Industrial Order Expectations. Estimate 3. Actual 17
• 10:00 US Existing Home Sales. Estimate 5.42M. Actual 5.48M
• 18:00 US Federal Reserve Chair Janet Yellen Speaks

Wednesday (November 22)

• 8:30 US Core Durable Goods Orders. Estimate 0.4%
• 8:30 US Unemployment Claims. Estimate 241K
• 8:30 US Core Durable Goods Orders. Estimate 0.4%
• 8:30 US Durable Goods Orders. Estimate 0.4%
• 10:00 US Revised UoM Consumer Sentiment. Estimate 98.2
• 14:00 US FOMC Meeting Minutes

*All release times are GMT

*Key events are in bold

GBP/USD for Tuesday, November 21, 2017

GBP/USD November 21 at 12:00 EDT

Open: 1.3233 High: 1.3268 Low: 1.3209 Close: 1.3235

GBP/USD Technical

GBP/USD inched higher in the Asian session. The pair edged higher in European trade but then retracted. GBP/USD has edged lower in North American trade

• 1.3186 is providing support
• 1.3321 is the next resistance line

Further levels in both directions:

• Below: 1.3186, 1.3048 and 1.2930
• Above: 1.3321, 1.3402 and 1.3503
• Current range: 1.3186 to 1.3321

OANDA’s Open Positions Ratio

GBP/USD ratio is unchanged in the Tuesday session. Currently, there is an almost even split between long and short positions. This is indicative of a lack of trader bias as to what direction GBP/USD will take next.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.