GBP/USD
After starting the week strongly getting within reach of 1.6450, the GBP/USD has since retreated sharply moving back down towards 1.6350. In the middle of last week 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. Over the last few weeks or so the pound has bounced strongly off the support level at 1.59 to return back to its present levels. 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.
Back in the middle of August the pound surged higher to through the resistance level at 1.56 to a then two month high around 1.5650, before spending the next few days consolidating and trading within a narrow range around 1.5650, receiving support from the key 1.56 level. A couple of months ago the resistance level at 1.54 was proving to be quite solid, and once it broke through the pound surged higher to a new seven week high near 1.56 in a solid 48 hour period run. In the week leading up to this the pound had recovered strongly and returned to the previous resistance level at 1.54 after the week earlier undoing some of its good work and falling away sharply from the resistance level at 1.54 back down to around 1.5150 and a two week low. A few weeks ago the 1.54 resistance level stood firm and the pound fell away heavily, however the 1.51 support level proved decisive and helped the pound rally strongly.
Earlier in July after having done very little for about a week, the GBP/USD started to move and surge higher and move through the 1.52 and 1.53 levels to the one month high above 1.54. Prior to the move higher, it moved very little as it found solid support at 1.51 and traded within a narrow range above this level. It established a trading range in between 1.51 and 1.52 after it took a breather from its excitement just prior when it experienced a strong surge higher moving back to within reach of the 1.52 level from below 1.49, all in 24 hours. About a month ago it did well to climb off the canvas and move back above 1.49 and towards 1.50 again before seeing the pound reverse and head back down below 1.49 to reach a new multi-year low near 1.48. It experienced sharp falls moving from 1.53 down to the key long term level of 1.50 and then through 1.49. That movement saw it resume its already well established medium term down trend from the second half of June and move it to a four month low.
The UK's manufacturing sector picked up further in November to its strongest level for almost three years, according to a closely watched survey. The Markit/CIPS Manufacturing Purchasing Managers' Index (PMI) also showed employment in the sector grew. The news adds to other recent data showing that the UK economy is putting the economic crisis years behind it. The PMI stood at 58.4 in November, its highest since February 2011. A reading over 50 indicates growth. October's figure was revised up to 56.5, adding to the brighter picture for the sector. The employment sub-index for the manufacturing sector rose to 54.5 in November, up from 51.9 in October. Markit economist Rob Dobson said UK manufacturing companies were creating about 5,000 jobs a month. "UK manufacturing continued to hit the high notes in November," he added. "It looks as if the strong recovery in the sector is translating into meaningful job creation."
GBP/USD Daily Chart" title="GBP/USD Daily Chart" width="551" height="219">
GBP/USD December 3 at 02:20 GMT 1.6357 H: 1.6427 L: 1.6343
GBP/USD Technical Chart" title="GBP/USD Technical Chart" width="551" height="219">
During the early hours of the Asian trading session on Tuesday, the GBP/USD is settling around 1.6360 after falling sharply over the last 24 hours from up near 1.6440. To start this year the pound fell very strongly from near 1.64 down to below 1.50 however the second half of the year has seen it recover strongly and move beyond 1.64 to new highs. Current range: Right above 16350 around 1.6360.
Further levels in both directions:
• Below: 1.6350, 1.6150 and 1.5900.
• Above: 1.6450.
GBP/USD Position Ratios Chart" title="GBP/USD Position Ratios Chart" width="551" height="219">
(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 back well below 30% as the GBP/USD continues to push higher strongly. Trader sentiment remains heavily in favour of short positions.
Economic Releases
- 00:01 UK BRC Retail Sales Monitor (Nov)
- 00:30 AU Net Exports of GDP (Q3)
- 00:30 AU Current Account (Q3)
- 00:30 AU Retail trade (Oct)
- 00:30 AU RBA - Overnight Rate (Dec)
- 09:30 UK BoE publishes Record of Financial Policy Committee
- 09:30 UK CIPS/Markit Construction PMI (Nov)
- 10:00 EU PPI (Oct)
- 15:00 US IBD Consumer Optimism (Dec)
- 22:00 US Vehicle Sales (Nov)