Forex Market: GBP/USD daily forecast

During yesterday’s trading session GBP/USD traded within the range of 1.6807-1.6901 and closed at 1.6876.

At 8:00 GMT today GBP/USD was gaining 0.05% for the day to trade at 1.6881. The pair touched a daily high at 1.6892 at 06:15 GMT.

Fundamental view

United States

At 14:00 GMT the Institute for Supply Management (ISM) is to report on manufacturing activity in the country. According to experts’ estimates, the gauge of manufacturing probably increased to 54.2 in April from 53.7 in the previous month. Values above 50.0 signify increased activity. In case market expectations are exceeded, the US dollar will receive support.

In addition, the initial jobless claims in the US probably fell to 319 000 in the week ended April 26th, from 329 000 a week ago, according to the median estimate by experts. The indicator measures the number of applications for unemployment benefits that are recorded each week in a report prepared by the Bureau of Labor Statistics in the United States. Initial application or (Initial Claim) means a completed document from an unemployed person before the local government, which is considered a claim for compensation or the possibility of compensation. The completion of the initial claim marks the beginning of a period in which the applicant receives unemployment benefits. The survey covers the number of applications registered in the previous week and is an important indicator concerning the health of the US labor market.

The data is due to be released at 12:30 GMT. In case initial jobless claims drop more than expected, this will heighten the appeal of the greenback.

United Kingdom

Manufacturing activity in the United Kingdom probably accelerated in April, with the corresponding PMI rising to 55.4, according to the median forecast by analysts. In March the index came in at a reading of 55.3. The index is based on a monthly study of activity in the manufacturing sector and forecast for its future development. The study is comparable to that of ISM in the U.S, as both studies are based on the opinions of executives at manufacturing companies. Managers are asked about future demand and orders for materials. The index summarizes their views and gives an overall picture of the future in the manufacturing sector. The indicator is represented by index values ​​between 1 and 100, with levels above 50 signaling that the economic outlook is positive. Values ​​below 50 indicate that the situation is deteriorating.

Higher than expected values would provide a boost for the sterling. The Chartered Institute of Purchasing and Supply (CIPS) is to announce the results from its monthly survey at 8:30 GMT.

Technical view

According to Binary Tribune’s daily analysis, in case GBP/USD manages to breach the first resistance level at 1.6916, it will probably continue up to test 1.6955. In case the second key resistance is broken, the pair will probably attempt to advance to 1.7010.

If GBP/USD manages to breach the first key support at 1.6822, it will probably continue to slide and test 1.6767. With this second key support broken, the movement to the downside will probably continue to 1.6728.