By Kenny Fisher
GBP/USD has posted strong gains in Tuesday trade, as the pair trades in the high-1.64 range in the North American session. In economic news, new Fed chief Janet Yellen testified before Congress and said that the Fed planned to continue tapering its QE scheme. US JOLTS Jobs Openings fell short of the estimate for January. In the UK, BRC Retail Sales Monitor surprised the markets with an excellent gain.
The pound got a boost on Tuesday as BRC Retail Sales Monitor jumped 3.9% in January, its sharpest gain since April 2011. Last month, British Retail Sales looked very strong as well, with a gain of 2.6%. This points to strong spending by UK consumers, which is crucial for economic growth. Meanwhile, there were no surprises from the BOE last week, as the central bank kept its asset purchase facility and interest rate levels unchanged. With the British economy showing marked improvement, there is pressure on the BOE to raise interest rates, but Governor Mark Carney has balked until now. We'll get a look at the BOE Inflation Report on Wednesday and if there are indications that inflation is on the rise, speculation will increase about a rate hike.
There wasn't much new from incoming Fed head Janet Yellen, who testified on Tuesday before the House Financial Services Committee. Yellen said that the Fed plans to continue trimming QE, provided that the employment picture continues to improve and inflation rises. She acknowledged that even though the unemployment rate has improved steadily, the recovery in the labor market is far from complete. Meanwhile, JOLTS Job Openings, a key event, showed little change in January, with a reading of 3.99 million. This was short of the estimate of 4.04 million, as we continue to see employment data below market expectations.
GBP/USD for Tuesday, February 11, 2014
GBP/USD February 11 at 16:25 GMT
GBP/USD 1.6471 H: 1.6487 L: 1.6393
- GBP/USD has posted strong gains in Tuesday trading. The pound has touched a high of 1.6487 in the North American session and continues to put pressure on the dollar.
- On the downside, 1.6416 has reverted to a support role as the pound pushes upwards. This is followed by support at 1.6329.
- 1.6549 is the next resistance line. There is stronger resistance at 1.6705.
- Current range: 1.6416 to 1.6549
Further levels in both directions:
- Below: 1.6416, 1.6329, 1.6231, 1.6125 and 1.6050
- Above: 1.6549, 1.6705, 1.6896, 1.6964 and 1.7087
OANDA's Open Positions Ratio
GBP/USD ratio has reversed directions on Tuesday, pointing to gains in long positions. This is consistent with the pair's movement, as the pound has posted gains against the dollar. A large majority of the open positions in the GBP/USD ratio are short, indicative of a trader bias towards the dollar recovering and gaining ground on the pound.
The pound has posted strong gains on Tuesday and continues to put pressure on the dollar in the North American session.
- 00:01 British BRC Retail Sales Monitor. Actual 3.9%.
- 12:30 US NFIB Small Business Index. Exp. 93.6 points. Actual 94.1 points.
- 14:00 US FOMC Member Charles Plosser Speaks.
- 15:00 US Fed Chair Janet Yellen testifies before the House Financial Services Committee.
- 15:00 US JOLTS JOB Openings. Exp. 4.04M. Actual 3.99M.
- 15:00 US Wholesale Inventories. Exp. 0.5%. Actual 0.3%.
*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.