GBP/USD has posted slight losses on Tuesday, continuing the downward trend which started late last week. In the North American session, the pair is trading in the mid-170 range. On the release front, British CBI Industrial Order Expectations dropped sharply in June and was well off expectations. Public Sector Net Borrowing improved and beat the estimate. In the US, Thursday's data was a mix. CPI posted a weak gain as the key inflation index continues to struggle. Meanwhile, there was excellent news on the housing front, as Existing Home Sales exceeded expectations and hit its highest level in eight months.
US inflation numbers continue to struggle. Core CPI posted a paltry gain of 0.1%, shy of the estimate of 0.1%. The key index has looked anemic in 2014, with its highest gain this year at just 0.3%. CPI gained 0.3% last month, matching the forecast. Meanwhile, Existing Home Sales jumped to 5.04 million, surpassing the estimate of 4.94 million. This was the best showing we've seen since October, and follows a disappointing release from Housing Starts, which was published last week.
In the UK, CBI Industrial Order Expectations was awful, slumping to 2 points in June, compared to 11 points a month earlier. This was well short of the estimate of 9 points. There is some concern about the health of the UK manufacturing sector, as Manufacturing Production posted a sharp decline in June. There was better news from Public Sector Net Borrowing, as the deficit narrowed last month to GBP 9.5 billion, beating the estimate of GBP 10.3 billion.
Recent US data has been mixed, but employment numbers continue to shine. Last Thursday, Unemployment Claims dropped slightly to 302 thousand, beating the estimate of 310 thousand. This figure marks a seven-week low, as the economy continues to churn out impressive employment data. With Janet Yellen telling Congress last week that a rate hike could be pushed forward if inflation and employment data exceeds expectations, improving employment data will put more pressure on the Fed to raise rates.
GBP/USD July 22 at 15:20 GMT
- GBP/USD 1.7051 H: 1.7084 L: 1.7042
GBP/USD Technicals
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1.6825 | 1.6920 | 1.7000 | 1.7183 | 1.7228 | 1.7383 |
- GBP/USD was stable in the European and Asian sessions and is under pressure in North American trading.
- 1.7000 continues to provide support the pair. 1.6920 is stronger.
- 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 pointing to gains in Tuesday trade. This is not consistent with the movement of the pair, as the pound has posted slight losses. A substantial majority of open positions in the GBP/USD ratio are short, indicative of a trader bias towards the dollar continuing to move higher.
GBP/USD Fundamentals
- 8:30 British Public Sector Net Borrowing. Estimate 10.3B. Actual 9.5B.
- 9:35 British 10 year Bond Auction. Actual 2.70%.
- 10:00 CBI Industrial Order Expectations. Estimate 9 points. Actual 2 points.
- 12:30 US Core CPI. Estimate 0.2%. Actual 0.1%.
- 12:30 US CPI. Estimate 0.3%. Actual 0.3%.
- 13:00 US HPI. Estimate 0.4%. Actual 0.4%.
- 14:00 US Existing Home Sales. Estimate 4.98M. Actual 5.04M.
- 14:00 US Richmond Manufacturing Index. Estimate 5 points. Actual 7 points.
* Key releases are highlighted in bold
*All release times are GMT