Seeking Alpha
Currencies, macro, fixed income
Profile| Send Message|
( followers)

By Kenny Fisher

GBP/USD has posted modest gains in Friday trading, as the pair trades in the mid-1.63 range in Friday trading. U.K. releases ended a strong week with more good news, as Halifax HPI registered a seven-month high. In the U.S., Unemployment Claims posted a third straight drop and the markets are hoping for more good news on Friday from Non-Farm Employment Change and the Unemployment Rate. As well, UoM Consumer Sentiment, a key event, will be released.

In the U.K., the Halifax Housing Price Index jumped 1.1%, its highest gain since April. This strong reading surpassed the estimate of 0.8% and points to increased activity in the British housing market. Consumer Inflation Expectations remains strong, with a gain of 3.6% in November. This could be an indication that consumers are finally "buying in" to the improving economy and that consumer confidence and spending is on the increase.

There were no surprises from the BOE, which set the monthly QE and interest rates on Thursday. The Bank maintained QE at 375 billion pounds, while the benchmark interest rate remained pegged at 0.50%. In the Autumn Forecast Statement, U.K. Treasurer George Osborne said that the government's economic policies had propelled the British economy, which has shown faster growth than any of the developed economies. The government has revised its growth forecast to 1.4% for 2013, double the 0.6% which was projected in March. For 2014, the growth is projected to hit 2.4%, up from 1.8%. The sharp economic growth which the U.K. has experienced has boosted confidence in the British pound, which has enjoyed excellent gains against the U.S. dollar since mid-November.

Over in the U.S., employment numbers continue to show improve, as Unemployment Claims dropped for the third consecutive week. The key indicator dropped from 316 to 298 thousand, easily beating the estimate of 328 thousand and posting a two-month low. There was further good news, as GDP shot up 3.6% in Q3. On Friday, we'll get a look at Non-Farm Payrolls and the Unemployment Rate. If these indicators point upwards, the greenback could move higher.

GBP/USD for Friday, December 6, 2013

Forex Rate Graph 21/1/13

GBP/USD December 6 at 12:00 GMT

GBP/USD 1.6319 H: 1.6370 L: 1.6361

GBP/USD Technical

S3 S2 S1 R1 R2 R3
1.6125 1.6231 1.6300 1.6476 1.6600 1.6696

  • GBP/USD has reversed directions and has posted gains on Friday. The pair touched a high of 1.6370 earlier in the European session.
  • The pair is testing support at the key line of 1.6300 and we could see this line fall during the day. This is followed by stronger support at 1.6231.
  • On the upside, the pair faces resistance at 1.6476. This is followed by resistance at the round number of 1.6600, which has remained intact since August 2011.
  • Current range: 1.6300 to 1.6476

OANDA's Open Positions Ratio

GBP/USD ratio is pointing to gains in long positions in Friday trading, continuing the trend we saw on Thursday. This is reflected in the pair's current movement, as the pound has posted gains. Short positions continue to dominate the ratio, reflecting a trader bias towards the U.S. dollar moving to higher ground at the expense of the pound.

The pound has started Friday with gains against the dollar. We could see some volatility from the pair during the North American session, as the U.S. releases key employment and consumer confidence data.

GBP/USD Fundamentals

  • 8:00 British Halifax HPI. Estimate 0.8%. Actual 1.1%.
  • 9:30 British Consumer Inflation Expectations. Actual 3.6%.
  • 13:30 US Non-Farm Employment Change. Estimate 180K.
  • 13:30 U.S. Unemployment Rate. Estimate 7.2%.
  • 13:30 U.S. Average Hourly Earnings. Estimate 0.2%.
  • 13:30 U.S. Core PCE Price Index. Estimate 0.1%.
  • 13:30 U.S. Personal Spending. Estimate 0.3%.
  • 13:30 U.S. Personal Income. Estimate 0.3%.
  • 14:55 U.S. UoM Preliminary Consumer Sentiment. Estimate 76.2 points.
  • 14:55 U.S. UoM Preliminary Inflation Expectations.
  • 20:00 U.S. FOMC Member Charles Evans Speaks.
  • 20:00 U.S. Consumer Credit. Estimate 14.6B.

*Key releases are highlighted in bold

*All release times are GMT

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.

Source: GBP/USD - Modest Gains After Solid U.K. Housing Data