GBP/USD for Thursday, February 27, 2014
Over the last week or so the GBP/USD has received solid support from the key 1.66 level after it retraced strongly from the resistance level at 1.68. In early February, the pound enjoyed a very healthy time moving well from the support level at 1.6250 through 1.6450 before pushing on to the multi-year high above 1.680. In late January the pound fell sharply and experienced its worst one week fall this year which resulted in it moving to the six week low near the support level at 1.6250. Over the last few months the pound has established and traded within a trading range roughly around the key level of 1.6450, whilst moving down to support at 1.6250 and up to 1.66 and beyond.
The 1.66 level has become quite significant and has loomed large throughout this year providing some resistance to higher prices. This level has resurfaced again as one of significance and it is now providing solid support. In late November it did well to break through the long term resistance level at 1.6250 which had established itself as a level of significance over the last few months. This level continues to play a role in providing support. In early November, the pound bounced strongly off the support level at 1.59 to return back to above 1.6250.
Towards the end of October the GBP/USD slowly drifted lower from the strong resistance level at 1.6250 and down to a three week low just around 1.5900 which was recently passed as the pound moved down towards 1.5850 only a week ago. For the week or so before that the pound moved well from the key level at 1.60 back up to the significant level at 1.6250, only again for this level to stand tall and fend off buyers for several days. Throughout September the pound rallied well and surged higher to move back up strongly through numerous levels which was punctuated by a push through to its highest level for the year just above 1.6250 several weeks ago. In the first week of October the pound was easing back towards 1.60 and 1.59 where it established a narrow trading range between before surging back to 1.6250 again.
British releases looked solid on Wednesday. Second Estimate GDP posted a gain of 0.7%, matching the forecast, as British economic activity continues to head in the right direction. Preliminary Business Investment sparkled with a gain of 2.4%. This was a strong improvement from the 1.4% gain in the previous release. However, the indicator fell short of the estimate of 2.6%. Earlier in the week, CBI Realized Sales and BBA Mortgage Approvals looked strong, improving in January.
GBP/USD Daily chart " title="GBP/USD Daily chart " height="242" width="474">
GBP/USD 4 hourly chart" title="GBP/USD 4 hourly chart" height="241" width="474">
GBP/USD February 26 at 23:05 GMT 1.6665 H: 1.6703 L: 1.6622
GBP/USD Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1.6600 | 1.6300 | 1.6250 | 1.6800 | --- | --- |
During the early hours of the Asian trading session on Thursday, the GBP/USD is easing back a little after its recent surge higher from the support level around 1.66. Current range: Right around 1.6660.
Further levels in both directions:
• Below: 1.6600, 1.6300, and 1.6250
• Above: 1.6800.
OANDA’s Open Position Ratios
GBP/USD Open Position Ratios" title="GBP/USD Open Position Ratios" height="27" width="474">
(Shows the ratio of long vs. short positions held for the GBP/USD among all OANDA clients. The left percentage (blue) shows long positions; the right percentage (orange) shows short positions.)
The GBP/USD long positions ratio has moved right back above 30% as the GBP/USD continues to rest on the support level at 1.66. Trader sentiment remains in favour of short positions.
Economic Releases
- 00:30 AU Capital Expenditure (Q4)
- 09:00 EU M3 Money Supply (Jan)
- 10:00 EU Business Climate Index (Feb)
- 10:00 EU EU Business & Consumer Survey (Feb)
- 13:30 CA Current Account (Q4)
- 13:30 US Durable goods orders (Jan)
- 13:30 US Durables ex defence (Jan)
- 13:30 US Durables ex transport (Jan)
- 13:30 US Initial Claims (22/02/2014)