GBP/USD – Slight Gains As UK Employment Numbers Impress

GBP/USD has moved higher on Wednesday and is trading in the high-1.67 range early in the North American session. On the release front, British Claimant Count Change beat the estimate and the Unemployment Rate dropped to a five-year low. On a less positive note, Average Earnings Index slipped to a seven-month low. In the US, Crude Oil Inventories improved in May but fell short of the estimate.

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, and has furthered speculation that the BOE could raise interest rates before the end of the year. 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%.

There was more good news on the US employment front, as JOLTS Job Openings jumped to 4.46 million, up sharply from 4.01 million a month earlier. This easily beat the estimate of 4.04 million, and comes on the heels of a positive Nonfarm Payrolls and a drop in the Unemployment Rate. We’ll get a look at the all-important Unemployment Claims on Thursday, and a strong reading could give a lift to the US dollar.

GBP/USD for Wednesday, June 11, 2014

GBP/USD June 11 at 17:40 GMT

GBP/USD 1.6783 H: 1.6798 L: 1.6739

GBP/USD Technical

• GBP/USD has posted gains on Wednesday. The pair flirted with the 1.68 line early in the European session.
• 1.6825 is a weak resistance line. 1.6920 is stronger.
• The round number of 1.6700 is providing support.
• 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 pointing to gains in Wednesday trading. This is consistent with the movement of the pair, as the pound has recorded 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 Wednesday. The pair is unchanged in the North American session.

GBP/USD Fundamentals

• 8:30 British Claimant Count Change. Estimate -25.0K. Actual -27.4K.
• 8:30 British Unemployment Rate. Estimate 6.7%. Actual 6.6%.
• 8:30 British Average Earnings Index. Estimate 1.2%. Actual 0.7%.
• 14:30 US Crude Oil Inventories. Estimate -1.3M. Actual -2.6M.
• 17:01 US 10-year Bond Auction.
• 18:00 US Federal Budget Balance. Estimate -132.8B.

*Key releases are highlighted in bold

*All release times are GMT

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