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By Kenny Fisher

GBP/USD has posted slight losses on Tuesday, as the pair trades in the low-1.71 range in the North American session. The pound lost ground after a dismal Manufacturing Production release, but has recouped some of these losses. The NIESR GDP Estimate posted another strong gain in June. In the US, employment numbers continue to impress, as JOLTS Job Openings jumped last month.

British Manufacturing Production was dismal in June, coming in at -1.3%. This was well off the estimate of +0.4%, and the sharpest decline since last April. Industrial Production followed suit, posting a decline of 0.7%, which was well off the estimate of a 0.4% gain. Last week's manufacturing PMI was steady, but Tuesday's weak numbers raise concerns about the health of the UK manufacturing sector.

US employment numbers continue to look sharp. On Tuesday, JOLTS Job Openings jumped to 4.64 million, easily beating the estimate of 4.53 million. This follows excellent figures from Nonfarm Payrolls and Unemployment Rate. Nonfarm Payrolls, one of the most important indicators, bounced back in June with a strong gain of 288 thousand new jobs. This crushed the estimate of 214 thousand. There was more good news from the Unemployment Rate, which continues to move downward. The indicator dipped to 6.1%, its lowest level since September 2008. The strong employment numbers are sure to increase speculation about an interest rate hike by the Federal Reserve, and remarks by Fed policymakers will be under the market microscope.

GBP/USD for Tuesday, July 8, 2014

GBP/USD July 8 at 16:15 GMT

GBP/USD 1.7132 H: 1.7148 L: 1.7086

GBP/USD Technical

S3 S2 S1 R1 R2 R3
1.6825 1.6920 1.7000 1.7183 1.7228 1.7383

  • GBP/USD dropped below the 1.71 line early in the European session, but has since rebounded.
  • 1.7000 continues to provide strong support.
  • 1.7183 is the next resistance line. This is followed by 1.7228, which has held firm since October 2008.
  • Current range: 1.7000 to 1.7183.

Further levels in both directions:

  • Below: 1.7000, 1.6920, 1.6825 and 1.6700
  • Above: 1.7183, 1.7228, 1.7383 and 1.7482

OANDA's Open Positions Ratio

GBP/USD is unchanged in Tuesday trade. This is consistent with the movement of the pair, as the pound has not shown much change since the day's opening. A substantial majority of open positions in the GBP/USD ratio are short, indicative of a trader bias towards the dollar moving higher.

GBP/USD Fundamentals

  • 8:30 British Manufacturing Production. Estimate +0.4%. Actual -1.3%.
  • 8:30 British Industrial Production. Estimate +0.3%. Actual -0.7%.
  • 11:30 US NFIB Small Business Index. Estimate 97.3 points. Actual 95.0 points.
  • 14:00 NIESR GDP Estimate. Actual 0.9%.
  • 14:00 US JOLTS Job Openings. Estimate 4.53M. Actual 4.64M.
  • 17:45 US FOMC Member Narayana Kocherlakota Speaks.
  • 19:00 US Consumer Credit. Estimate 21.3B.

*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: Slight Losses As Manufacturing Production Slides