Yesterday’s trade saw GBP/USD within the range of 1.5631-1.5743. The pair closed at 1.5637, losing 0.61% on a daily basis.
At 7:42 GMT today GBP/USD was down 0.06% for the day to trade at 1.5628. The pair touched a daily low at 1.5624.
Fundamentals
United Kingdom
Services sector activity
Activity in United Kingdom’s sector of services probably slightly increased in November, with the corresponding PMI coming in at 56.5, up from 56.2 in the prior month. Octobers PMI reading has been the lowest since May 2013, when the index was registered at 54.9. The index is based on a survey, encompassing managers of companies, that operate in sectors such as transportation, communications, IT, financial intermediation, tourism. They are asked about their estimate regarding current business conditions (new orders, output, employment, demand in the future). Values above the key level of 50.0 signify that activity in the sector has expanded. Larger-than-projected improvement in the index value would certainly heighten the appeal of the pound. The Chartered Institute of Purchasing and Supply (CIPS) is to announce the official reading at 9:30 GMT.
Autumn Statement
At 12:30 GMT the HM Treasury is to present this years Autumn Statement. It is one of the two statements, which the Treasury makes every year to Parliament upon publication of economic forecasts. The document presents an updated economic outlook and also previews the governments budget for the next year.
United States
Change in non-farm employment
Employers in the US non-farm private sector probably added 224 000 new jobs during November, according to the median estimate by experts, following 230 000 new positions added in October. If so, this would be the lowest gain in jobs since August, when 202 000 jobs were added. The employment report by Automated Data Processing Inc. (ADP) is based on data that encompasses 400 000 – 500 000 companies employing over 24 million people, working in the 19 major sectors of the economy. The ADP employment change indicator is calculated in accordance with the same methodology, which the Bureau of Labor Statistics (BLS) uses. Published two days ahead of governments employment statistics, this report is used by traders as a reliable predictor of the official non-farm payrolls data. Creation of jobs is considered of utmost importance for consumer spending, while the latter is a major driving force behind economic growth. In case expectations were exceeded, this would bolster demand for the dollar. The official figure is scheduled to be published at 13:15 GMT.
ISM Non-Manufacturing data
Activity in United States’ sector of services probably slightly improved in November, with the corresponding non-manufacturing PMI coming in at a reading of 57.5, according to expectations, from 57.1 in October. The latter has been the lowest level of the PMI since June, when it was reported at 56.0. This is a compound index, based on the values of four equally-weighted components, that comprise it. These sub-indexes reflect seasonally adjusted new orders, seasonally adjusted employment, seasonally adjusted business activity and supplier deliveries.
The business report is based on data compiled from monthly replies to questions asked of over 370 purchasing and supply executives operating in over 62 different industries, which represent nine divisions from the Standard Industrial Classification (SIC) categories.
Participants can either respond with “better”, “same”, or “worse” to the questions about the industry, in which they operate. The resulting PMI value is measured from 0 to 100. If the index shows a value of 100.0, this means that 100% of the respondents reported an improvement in conditions. If the index shows a value of 0, this means that 100% or the respondents reported a deterioration in conditions. If 100% of the respondents saw no change in conditions, the index will show a reading of 50.0. Therefore, readings above the key level of 50.0 are indicative of expanding activity. In case market expectations were exceeded, the US dollar would receive a boost. The Institute for Supply Management (ISM) is to release the official PMI reading at 15:00 GMT.
”Beige Book” report
At 19:00 GMT the Federal Reserve is to release its “Beige Book” report. It is published eight times during the year. Each of the banks in the 12 Federal Reserve Districts gathers data in regard to current economic situation in the country on the basis of interviews with key business contacts, economists, market experts, and other sources. In case the Beige Book presents an optimistic economic outlook, this will usually support the greenback, while a pessimistic view will have a bearish effect on the currency.
Pivot Points
According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.5670. In case GBP/USD manages to breach the first resistance level at 1.5710, it will probably continue up to test 1.5782. In case the second key resistance is broken, the pair will probably attempt to advance to 1.5822.
If GBP/USD manages to breach the first key support at 1.5598, it will probably continue to slide and test 1.5558. With this second key support broken, the movement to the downside will probably continue to 1.5486.
The mid-Pivot levels for today are as follows: M1 – 1.5522, M2 – 1.5578, M3 – 1.5634, M4 – 1.5690, M5 – 1.5746, M6 – 1.5802.
In weekly terms, the central pivot point is at 1.5696. The three key resistance levels are as follows: R1 – 1.5777, R2 – 1.5908, R3 – 1.5989. The three key support levels are: S1 – 1.5565, S2 – 1.5484, S3 – 1.5353.
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