GBP/USD

GBP/USD has posted gains on Thursday, as the pair trades at 1.5480 in the European session. The pound reacted positively as British Retail Sales posted an excellent gain of 1.9%. In the US, we’ll get a look at Unemployment Claims, with the indicator expected to rise to 266 thousand.

BOE Governor Mark Carney testified before the Treasury Select Committee on Tuesday on the proposed Bank of England Bill. This bill would provide some oversight over the BOE, with bill supporters welcoming an increase in transparency. However, critics are concerned that the bill could reduce the independence of the central bank and lead to political interference in its decision-making process. In earlier testimony before the Treasury Select Committee, BOE member Anthony Habgood criticized the bill, saying that it posed a “potential threat to the carefully constructed independence of the policy functions of the bank”. To frame the issue, this is a question of the independence of the central bank vs. its accountability to the public. On Wednesday, Carney said that he was in favor of the UK remaining in the European Union, noting that the UK had benefited from the continent’s free movement of goods, services and capital. Finance Minister George Osborne was quick to praise Carney’s remarks. The British government has promised a referendum on whether the country should remain in the EU in 2017, and a public stance by the BOE in favor of the UK staying in the EU will be important for the “Yes” vote.

Recent US data has not been has strong as hoped, with key numbers sending a mixed message about the health of the economy. This has reduced the likelihood of a rate hike by the Federal Reserve before the end of 2016. The markets remain frustrated about the Fed’s lack of communication with the markets, as FOMC members continue to send out contradictory messages about the Fed’s plans. Still, an improvement in US numbers, especially employment and consumer indicators, could quickly revive speculation about a rate hike and boost the US dollar. This means that the upcoming US Unemployment Claims report will be carefully monitored, and an unexpected reading could have a sharp impact on the direction of GBP/USD. The estimate stands at 266 thousand, higher than the previous report of 255 thousand.

GBP/USD Fundamentals

Thursday (Oct. 22)

• 8:30 British Retail Sales. Estimate 0.3%. Actual 1.9%.
• 12:30 US Unemployment Claims. Estimate 266K
• 13:00 US HPI. Estimate 0.4%
• 14:00 US Existing Home Sales. Estimate 5.38M
• 14:00 US CB Leading Index. Estimate 0.0%
• 14:30 US Natural Gas Storage. Estimate 89B

*Key releases are highlighted in bold

*All release times are GMT

GBP/USD for Thursday, October 22, 2015

GBP/USD October 22 at 11:25 GMT

GBP/USD 1.5484 H: 1.5507 L: 1.5414

GBP/USD Technical

• GBP/USD was flat in the Asian session and has posted small gains in European trading.
• On the upside, 1.5485 was tested earlier and remains under strong pressure.
• 1.5341 is a strong support level.
• Current range: 1.5341 to 1.5485

Further levels in both directions:

• Below: 1.5341, 1.5269, 1.5163 and 1.5026
• Above: 1.5485, 1.5590 and 1.5660

OANDA’s Open Positions Ratio

GBP/USD ratio is showing a slight movement towards long positions on Thursday. The ratio is currently evenly split between short and long positions, pointing to a lack of trader bias as to what to expect from GBP/USD.