GBP/USD – Slight Losses to Start Week

The pound has posted slight losses on Monday, as the currency remains under pressure from the dollar. In the North American session, GBP/USD is trading in the mid-1.51 range. On the release front, today’s sole US release was the Labor Conditions Market Index, which jumped to 6.1 points. As well, FOMC member Dennis Lockhart will deliver a speech in Atlanta. There are no British releases on Monday, but the markets are keeping a close eye on British inflation numbers, which will be released on Tuesday.

British releases wrapped up the week on a high note, as Manufacturing Production gained 0.7% in November, above the forecast of 0.4%. This marked the key indicator’s strongest showing since February. Meanwhile, the trade deficit continues to shrink, as the November report came in at GBP-8.8 billion, the smallest trade deficit in eight months. The estimate stood at GBP-9.5 billion. The trade gap was aided by a strong decrease in oil imports, which dropped to their lowest level in over four years.

US releases wrapped up the week in fine fashion, as employment data shined. Nonfarm Employment Change, one of the most important indicators, posted a gain of 252 thousand, easily beating the estimate of 241 thousand. The unemployment rate fell to 5.6%, edging below the forecast of 5.7%. Meanwhile, Average Earnings dropped 0.2%, its first decline since July 2013. A lack of wage pressure means that the Fed may be able to postpone a rate hike until the second half of 2015.

GBP/USD for Monday, January 12, 2015

GBP/USD January 12 at 16:30 GMT

GBP/USD 1.5135 H: 1.5190 L: 1.5099

GBP/USD Technical

• GBP/USD was flat in the Asian session. The pair recorded losses early in the European session but then recovered. GBP/USD is steady in the North American session.
• 1.5165 has seen action during the day. It is currently a weak resistance line. 1.5282 is stronger.
• 1.5008 remains 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 Monday. This is consistent with the pair’s movement, as the pound has posted losses. The ratio has a majority of long positions, indicative of trader bias towards the pound reversing directions and moving higher.

GBP/USD Fundamentals

• 15:10 US Labor Market Conditions Index. Actual 6.1 points.
• 17:40 US FOMC Member Dennis Lockhart Speaks.

*Key releases are highlighted in bold

*All release times are GMT

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