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By Kenny Fisher

GBP/USD is trading quietly on Tuesday, as the pair trades just above the 1.67 line in the North American session. In economic news, news, the UK released a host of inflation indicators, led by the all-important CPI. The index dipped below the BOE's target of 2.0% for the first time in over five years. In the US, today's highlight is Empire State Manufacturing Index. The indicator slid badly in January and was well off expectations.

Inflation in the UK was on the market's mind on Tuesday, with the release of a host of inflation indicators. CPI, one of the most important economic indicators, dipped to 1.9%, the first time it has fallen below the BOE inflation target of 2.0% since November 2009. Other inflation indicators, notably PPI Input and Core CPI, fell short of their estimates, but the pound didn't show much response to today's inflation releases. The BOE has said it expects inflation to remain close to the 2.0% level for the next three years.

In the US, it's been a quiet week so far, with no major releases due until Wednesday. The Empire State Manufacturing Index, an important manufacturing indicator, slid to 4.5 points in January, down sharply from 12.5 a month earlier. The estimate stood at 9.9 points. We'll get another look at US manufacturing numbers later in the week, with the release of the Philly Fed Manufacturing Index, a key event.

GBP/USD for Tuesday, February 18, 2014

Forex Rate Graph 21/1/13

GBP/USD February 18 at 16:00 GMT

GBP/USD 1.6715 H: 1.6742 L: 1.6656

GBP/USD Technical

S3 S2 S1 R1 R2 R3
1.6416 1.6549 1.6705 1.6896 1.6964 1.7087

  • GBP/USD has edged lower in Tuesday trading. The pound lost ground early in the European session, dropping to a low of 1.6656. It has since rebounded and is trading around the 1.67 line.
  • On the downside, 1.6705 has been under strong pressure throughout the day. There is stronger support at 1.6549.
  • 1.6896 is the next resistance line. Next, there is resistance at 1.6964, protecting the key 1.70 level.
  • Current range: 1.6705 to 1.6896.

Further levels in both directions:

  • Below: 1.6705, 1.6549, 1.6416, 1.6329 and 1.6231
  • Above: 1.6896, 1.6964, 1.7087 and 1.7192

OANDA's Open Positions Ratio

GBP/USD ratio is pointing to gains in long positions in Tuesday trading. This not consistent with the pair's current movement, as the pound has posted modest losses 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 continuing to move higher.

GBP/USD continues to point downwards on Tuesday, and the dollar is putting pressure on the pound in the North American session.

GBP/USD Fundamentals

  • 9:30 British CPI. Estimate 2.0%. Actual 1.9%.
  • 9:30 British PPI Input. Estimate -0.4%. Actual -0.9%.
  • 9:30 British RPI. Estimate 2.7%. Actual 2.8%.
  • 9:30 British Core CPI. Estimate 1.9%. Actual 1.6%.
  • 9:30 British HPI. Estimate 5.8%. Actual 5.5%.
  • 9:30 British PPI Output. Estimate 0.2%. Actual 0.3%.
  • 13:30 US Empire State Manufacturing Index. Estimate 9.9 points. Actual 4.5 points.
  • 14:00 US TIC Long-Term Purchases. Estimate +28.9B. Actual -45.9B.
  • 15:00 US NAHB Housing Market Index. Estimate 56 points. Actual 46 points.

*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 - Steady As CPI Dips Below 2.0% Level