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GBP/USD – British pound unchanged on mixed U.S. numbers

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GBP/USD is steady in the Thursday session, continuing the trend seen on Wednesday. In North American trade, the pair is trading at 1.3051, unchanged on the day. In economic news, the U.K posted a rare budget surplus in January. The surplus of GBP 15.8 beat the estimate of GBP 11.1 billion. In the U.S., durable goods orders improved to 1.2%, but fell short of the estimate of 1.6%. Core Durable Goods Orders rebounded with a gain of 0.1%, shy of the forecast of 0.3%. Unemployment claims dropped sharply to 216 thousand, a four-week low. However, the Philly Fed Manufacturing Index slipped to -4.1, its first decline since May 2016.

The Federal Reserve has presented a dovish stance in 2019, and this position was underscored in the minutes from the January 2019 policy meeting. Participants reiterated that the Fed will remain cautious, stating that a “patient approach to monetary policy” was appropriate. However, members added that if economic projections improved, the Fed could revise the “patient approach”. The minutes noted that the employment market had strengthened and economic activity was rising, but expected GDP in 2019 to slow down compared to 2018.

The pound has enjoyed a strong week, with gains of 1.4 percent. Investors have responded positively to strong data this week. On Thursday, the U.K. posted the largest January surplus on record. Earlier in the week, employment numbers were strong. Wage growth climbed 3.4% for a second straight month, while the unemployment rate remained pegged at 4.0%. Still, the uncertainty of Brexit remains a serious concern. With London and Brussels deadlocked over a withdrawal agreement, a no-deal scenario remains a strong possibility, which could have severe ramifications for the British economy and could send the pound sharply lower. With only five weeks left before Britain departs from the E.U., the pound could face some volatility in the near term.

Fed tries to stay ahead of the (yield) curve

Aussie surges on strong jobs report

GBP/USD Fundamentals

Thursday (February 21)

  • 4:30 British Public Sector Net Borrowing. Estimate -11.1B. Actual -15.8B
  • 8:30 US Core Durable Goods Orders. Estimate 0.3%. Actual 0.1%
  • 8:30 US Durable Goods Orders. Estimate 1.6%. Actual 1.2%
  • 8:30 US Philly Fed Manufacturing Index. Estimate 14.1
  • 8:30 US Unemployment Claims. Estimate 228K
  • 9:45 US Flash Manufacturing PMI. Estimate 54.9
  • 9:45 US Flash Services PMI. Estimate 54.4
  • 10:00 US CB Leading Index. Estimate 0.1%
  • 10:00 US Existing Home Sales. Estimate 5.01M
  • 10:30 US Crude Oil Inventories. Estimate 2.9M

*All release times are EST

*Key events are in bold

GBP/USD for Thursday, February 21, 2019

GBP/USD February 21 at 11:10 EST

Open: 1.3050 High: 1.3095 Low: 1.3026 Close: 1.3049

GBP/USD Technical

S1 S2 S1 R1 R2 R3
1.2729 1.2851 1.2910 1.3070 1.3170 1.3258

In the Asian session, GBP/USD posted small losses but recovered. The pair edged higher in the European session. GBP/USD recorded slight gains in North American trade but has retracted

  • 1.2910 is providing support
  • 1.3070 was tested earlier in resistance. It is a weak line
  • Current range: 1.3070 to 1.3170

Further levels in both directions:

  • Below: 1.3070, 1.2910, 1.2851 and 1.2729
  • Above: 1.3170, 1.3258 and 1.3372

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