GBP/USD - Pound Slightly Lower As U.S. Unemployment Claims Dip

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 |  Includes: FXB, UDN, UUP
by: Dean Popplewell

By Kenny Fisher

The British pound has edged lower on Thursday, as the pair trades in the high-1.67 range in the North American session. In the UK, there were no changes to the BOE Asset Purchase Facility or Official Bank Rate. In the US, Unemployment Claims looked sharp, beating the forecast.

There were no surprise from the Bank of England on Thursday, which maintained the QE and interest rate levels for April. QE remains at 375 billion pounds, while interest rates will stay at 0.50%. There has been increasing speculation that interest rates may rise, but the BOE continues to try and dampen these sentiments, insisting that no rate hikes are on the horizon.

In the US, Unemployment Claims rebounded sharply, as the key indicator dropped to 300 thousand last week. This beat the estimate or 314 thousand and marked the lowest reading since May 2007. With the Federal Reserve looking to trim its QE program and speculation rising about a possible interest rate increase, every employment release is under the market microscope.

Wednesday's release of the Federal Reserve minutes was eagerly anticipated, but the minutes did not shed light on the question of when the Fed might raise interest rates. Policymakers expressed concern about speculation over this issue, but didn't say when the central bank might change its current monetary policy. The minutes were more dovish than expected, and the US dollar responded with losses.

GBP/USD for Thursday, April 10, 2014

Forex Rate Graph 21/1/13

GBP/USD April 10 at 15:10 GMT

GBP/USD 1.6780 H: 1.6820 L: 1.6755

GBP/USD Technical

S3 S2 S1 R1 R2 R3
1.6549 1.6705 1.6765 1.6896 1.7000 1.7210
Click to enlarge
  • GBP/USD has edged lower in Thursday trade.
  • On the downside, 1.6765 has switched to a support role. The next support line is 1.6705.
  • 1.6896 is providing strong resistance.

Further levels in both directions:

  • Below: 1.6765, 1.6705, 1.6549 and 1.6416
  • Above: 1.6896, 1.70, 1.7210 and 1.7374.

OANDA's Open Positions Ratio

GBP/USD ratio is unchanged on Thursday. This is not consistent with the movement of the pair, as the pound has edged lower. A large majority of the open positions in the GBP/USD ratio are short, indicative of a trader bias towards the dollar posting further gains against the pound.

The pound has posted modest losses on Thursday, reversing the trend we have seen throughout the week. The pair has edged higher in North American trading.

GBP/USD Fundamentals

  • 11:00 British Asset Purchase Facility. Estimate 375B. Actual 375B.
  • 11:00 British Official Bank Rate. Estimate 0.50%. Actual 0.50%.
  • 12:30 US Unemployment Claims. Estimate 314K. Actual 300K.
  • 12:30 US Import Prices. Estimate 0.2%. Actual 0.6%.
  • 14:30 US Natural Gas Storage. Estimate 15B. Actual 4B.
  • 17:01 US 30-year Bond Auction.
  • 18:00 US Federal Budget Balance. Estimate -76.5B.

*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.