Forex Market: GBP/USD daily trading forecast

Friday’s trade saw GBP/USD within the range of 1.6015-1.6100. The pair closed at 1.6091, gaining 0.37% on a daily basis.

At 8:34 GMT today GBP/USD was up 0.08% for the day to trade at 1.6096. The pair touched a daily high at 1.6108 at 2:55 GMT.

Fundamentals

United States

Services PMI by Markit – preliminary estimate

Activity in the US sector of services probably slowed down in October, with the corresponding preliminary Purchasing Managers’ Index coming in at a reading of 57.0. If so, this would be the lowest index reading since April, when the final value was reported at 55.0. In September the final seasonally adjusted PMI stood at 58.9, up from a preliminary value of 58.5. Values above the key level of 50.0 indicate optimism (expanding activity). Lower than expected PMI readings would mount selling pressure on the US dollar. The preliminary data by Markit Economics is due out at 13:45 GMT.

Pending home sales

The index of pending home sales in the United States probably rose 0.3% during September compared to August, according to expectations. In August compared to July sales dropped 1.0%.

When a sales contract is accepted for a property, it is recorded as a pending home sale. As an indicator, the index provides information on the number of future home sales, which are in the pipeline. It gathers data from real estate agents and brokers at the point of a sale of contract and is currently the most accurate indicator regarding US housing sector. It samples over 20% of the market. In addition, over 80% of pending house sales are converted to actual home sales within 2 or 3 months. Therefore, this index has a predictive value about actual home sales.

Although there are some cancellations, there are not enough for the data to be skewed one way or another. The base value of the index is equal to 100, while the base year is 2001, when there has been a high level of home sales.

The National Association of Realtor’s (NAR) will release the official sales data at 14:00 GMT on Monday. In case pending home sales increased more than anticipated, this would have a bullish effect on the greenback.

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.6069. In case GBP/USD manages to breach the first resistance level at 1.6122, it will probably continue up to test 1.6154. In case the second key resistance is broken, the pair will probably attempt to advance to 1.6207.

If GBP/USD manages to breach the first key support at 1.6037, it will probably continue to slide and test 1.5984. With this second key support broken, the movement to the downside will probably continue to 1.5952.

The mid-Pivot levels for today are as follows: M1 – 1.5968, M2 – 1.6011, M3 – 1.6053, M4 – 1.6096, M5 – 1.6138, M6 – 1.6181.

In weekly terms, the central pivot point is at 1.6090. The three key resistance levels are as follows: R1 – 1.6187, R2 – 1.6283, R3 – 1.6380. The three key support levels are: S1 – 1.5994, S2 – 1.5897, S3 – 1.5801.