GBP/USD has posted strong gains on Tuesday, as the pair trades in the low-1.57 range in the North American session. The pound has recovered Monday’s losses. On the release front, CPI continues to lose ground and dipped to 1.0%. The BOE released its Financial Stability Report, with the central bank voicing its concern about lower oil prices. Over in the US, it was a disappointing day, as Housing Starts and Building Permits missed their estimates and the Manufacturing PMI softened in December.
Inflation was on the mind of the markets and the BOE on Thursday, as the UK released CPI as well as a host of other inflation indicators. CPI continues to lose ground, falling to 1.0%, its lowest level since 2002. Still, the key indicator was within expectations, as the estimate stood at 1.2%. The BOE released its Financial Stability Report, noting that although the sharp fall in oil prices should boost domestic growth, it could result in inflation projections missing their target. Lower inflation levels give the BOE some breathing room regarding a rate hike in 2015, which only a few months ago seemed like a sure bet.
In the US, Tuesday’s data was a disappointment. Building Permits dropped to 1.04 million, short of the estimate of 1.06 million. Housing Starts rose slightly to 1.04 million, shy of the estimate of 1.06 million. The Manufacturing PMI dipped to 53.7 points, well off the forecast of 56.1 points. This was the indicator’s worst showing since January.
GBP/USD December 16 at 17:00 GMT
- GBP/USD 1.5636 H: 1.5785 L: 1.5614
GBP/USD Technicals
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1.5282 | 1.5392 | 1.5505 | 1.5644 | 1.5717 | 1.5864 |
- GBP/USD was uneventful in the Asian session. The pair posted sharp gains in the European session, testing resistance at 1.5717. The pair has edged lower in North American trade.
- 1.5644 is a weak resistance line. Will the pair break through during the North American session?
- 1.5505 is a strong support level.
- Current range: 1.5505 to 1.5644
Further levels in both directions:
- Below: 1.5505, 1.5392, 1.5282 and 1.5165
- Above: 1.5644, 1.5717, 1.5864, 1.6000 and 1.6141
OANDA’s Open Positions Ratio
GBP/USD ratio is pointing to gains in long positions on Tuesday, continuing the direction seen a day earlier. This is consistent with the movement of the pair, as the pound has posted strong gains. The ratio is pointing to a majority of long positions, indicative of trader bias towards the pound gaining more ground.
GBP/USD Fundamentals
- 7:00 British Bank Stress Test Results.
- 7:00 BOE Financial Stability Report.
- 7:00 BOE Financial Policy Committee Statement.
- 9:15 BOE Governor Mark Carney Speaks.
- 9:30 British CPI. Estimate 1.2%. Actual 1.0%.
- 9:30 British PPI Input. Estimate -1.1%. Actual -1.0%.
- 9:30 British RPI. Estimate 2.2%. Actual 2.0%.
- 9:30 British Core CPI. Estimate 1.5%. Actual 1.2%.
- 9:30 British HPI. Estimate 13.2%. Actual 10.4%.
- 9:30 British PPI Output. Estimate -0.3%. Actual +0.2%.
- 14:15 US Housing Starts. Estimate 1.04M. Actual 1.03M.
- 14:45 US Flash Manufacturing PMI. Estimate 56.1 points. Actual 53.7 points.
*Key releases are highlighted in bold
*All release times are GMT