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By Kenny Fisher

The pound has edged lower in Tuesday trading, after sharp losses to start the week. GBP/USD is trading in the mid-1.66 range in the North American session. In economic news, BOE Governor Mark Carney ruled out any rate hikes for now and said that the UK economic recovery could continue without inflation moving higher. British Manufacturing Production edged higher in February, while the NEISR GDP Estimate posted another strong gain, indicative of healthy economic growth. In the US, JOLTS Job Openings disappointed and fell short of the estimate.

Testifying before parliament, BOE Governor Mark Carney reiterated that the Bank was in no rush to raise interest rates, noting that the economy may have spare capacity of up to 1.5% of GDP. Carney stated that any increase in rates would be done gradually and to a limited extent. With the UK economy continuing to expand, Carney continues to dampen expectations about any rate increases to prevent the economy from overheating. Meanwhile, other policy makers differ with Carey's forecast of spare capacity. Martin Weale, a member of the BOE's Monetary Policy Committee stated that the economy's slack is under the 1.0% level. The divergence in opinion could indicate a split regarding future monetary policy and this could impact on the pound.

US employment numbers remain in the spotlight on Tuesday. US JOLTS Job Openings dropped slightly in February, coming in at 3.97 million. This fell short of the estimate of 4.02 million. Late last week the markets were treated to better news, as Unemployment Claims and Nonfarm Payrolls showed sharp improvement in February. Nonfarm Payrolls, one of the most important economic indicators, jumped to 175 thousand in February, up from 1113 thousand a month earlier. This was well above the estimate of 151 thousand. Unemployment Claims dropped to 323 thousand, a thirteen-week low.

With some solid US employment numbers last week, it's a good bet that the Fed is likely to take its scissors and trim QE next week for the third time since the haircutting began in December. New York Fed President William Dudley stated last week that the threshold to alter the Fed's program to wind up QE was "pretty high". In other words, short of a serious economic downturn in the US economy, we can expect the QE tapers to continue. If all goes well, the Fed plans like to wrap up QE by the end of 2014.

GBP/USD for Tuesday, March 11, 2014

Forex Rate Graph 21/1/13

GBP/USD March 11 at 16:35 GMT

GBP/USD 1.6635 H: 1.6654 L: 1.6597

GBP/USD Technical

S3 S2 S1 R1 R2 R3
1.6329 1.6416 1.6549 1.6705 1.6765 1.6896

  • GBP/USD is under pressure in the Tuesday trade. The pair dropped below the 1.66 line in the European session but has since recovered.
  • 1.6549 is providing support. This is followed by support at 1.6549.
  • On the upside, 1.6705 continues in a resistance role. Next, there is resistance at 1.6765.
  • Current range: 1.6549 to 1.6705.

Further levels in both directions:

  • Below: 1.6549, 1.6416, 1.6329 and 1.6236
  • Above: 1.6705, 1.6765, 1.6896, 1.6964 and 1.7087

OANDA's Open Positions Ratio

GBP/USD ratio is pointing to gains in long positions on Tuesday, continuing the trend we saw at the start of the week. This is not consistent with the pair's current move, as the pound has moved slightly lower. A large majority of the open positions in the GBP/USD ratio are short, indicative of a trader bias towards the dollar continuing to post gains.

GBP/USD has posted slight losses on Tuesday The pound is steady in the North American session.

GBP/USD Fundamentals

  • 00:01 British BRC Retail Sales Monitor. Actual -1.0%.
  • 9:30 British Manufacturing Production. Estimate 0.3%. Actual 0.4%.
  • 9:30 British Industrial Production. Estimate 0.3%. Actual 0.1%.
  • 9:30 British Inflation Report Hearings.
  • 10:35 British 10-y Bond Auction. Actual 2.93%.
  • 15:00 British NIESR GDP Estimate. Actual 0.8%.
  • 11:30 US NFIB Small Business Index. Estimate 95.3 points. Actual 91.4 points.
  • 14:00 US JOLTS Jobs Openings. Estimate 4.02M. Actual 3.97M.
  • 14:00 US Wholesale Inventories. Estimate 0.5%. Actual 0.6%.

*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 - Pressure On Pound As Carney Says No Rate Hike For Now