GBP/USD – Pound Lower Despite Steady UK Manufacturing Data

The pound has posted losses on Monday, as GBP/USD trades in the low-1.50 range. On the release front, British Manufacturing PMI improved to 53.0 points. In the US, the ISM Manufacturing PMI continued to soften, slipping to 53.5 points.

British Manufacturing PMI rose to 53.0 points in January, up from 52.5 points a month earlier. This was very close to the forecast of 52.9 points. It was a different story in the US, as Manufacturing PMI slipped for a third straight month. The index dropped to 53.5 points in January, short of the forecast of 54.9 points. Despite the weak US numbers, the dollar has posted moderate gains against the pound, which is struggling to stay above the symbolic 1.50 level.

On Friday, US Advance GDP for Q4 disappointed, posting a gain of 2.6%. The markets had anticipated a gain of 3.0%. Still, market sentiment towards the US economy remains positive, underscored by the Federal Reserve statement last week, where the Fed noted solid growth in the economy. The Fed remains on track to raise rates later in 2015, and the dollar will likely benefit as speculation continues over the timing of a rate hike.

GBP/USD for Monday, February 2, 2015

GBP/USD February 2 at 16:25 GMT

GBP/USD 1.5021 H: 1.5087 L: 1.5005

GBP/USD Technical

• GBP/USD showed little movement in the Asian session. The pair lost ground in the European session, testing support at 1.5008. The pair is stable in North American trade.
• 1.5008 is a weak support line. Will it break in the North American session? 1.4873 is stronger.
• 1.5165 remains a strong resistance line.
• Current range: 1.5008 to 1.5165

Further levels in both directions:

• Below: 1.5008, 1.4873, 1.4781 and 1.4670
• Above: 1.5165, 1.5282, 1.5392, 1.5505 and 1.5642

OANDA’s Open Positions Ratio

GBP/USD ratio is pointing to gains in long positions on Monday. This is not consistent with the pair’s movement, as GBP/USD has recorded losses. The ratio is has a majority of long positions, indicative of trader bias towards the pound reversing directions and moving to higher ground.

GBP/USD Fundamentals

• 9:30 British Manufacturing PMI. Estimate 52.9 points. Actual 53.0 points.
• 13:30 US Core PCE Price Index. Estimate 0.0%. Actual 0.0%.
• 13:30 US Personal Spending. Estimate -0.1%. Actual -0.3%.
• 13:30 US Personal Income. Estimate 0.2%. Actual 0.3%.
• 14:45 US Final Manufacturing PMI. Estimate 54.1 points. Actual 53.9 points.
• 15:00 US ISM Manufacturing PMI. Estimate 54.9 points. Actual 53.5 points.
• 15:00 US Construction Spending. Estimate 0.9%. Actual 0.4%.
• 15:00 US ISM Manufacturing Prices. Estimate 40.1 points. Actual 35.0 points.

*Key releases are highlighted in bold

*All release times are GMT

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