Forex Market: GBP/USD daily trading forecast

Yesterday’s trade saw GBP/USD within the range of 1.5401-1.5466. The pair closed at 1.5413, losing 0.14% on a daily basis.

At 7:53 GMT today GBP/USD was up 0.12% for the day to trade at 1.5433. The pair touched a daily high at 1.5434 at 7:49 GMT.

Fundamentals

United Kingdom

Annualized retail sales in the United Kingdom probably rose at a rate of 5.9% in January, according to the median forecast by experts, after in December sales increased at another 4.3%. If so, this would be the 23rd consecutive month of sales growth. In monthly terms, retail sales probably dropped 0.2% during January, following three consecutive months of gains. Annualized retail sales, without taking into account fuel sales, probably rose 5.9% in January, following a 4.2% surge in December. If so, this would be the 34th consecutive month of growth in annual core sales.

This is a short-term indicator, which provides key information about consumption on a national scale. Higher retail sales suggest stronger consumer demand, confidence and economic growth, respectively. Therefore, in case the index of retail sales increased at a faster-than-projected pace, this would be pound positive. The Office for National Statistics is expected to publish the official report at 9:30 GMT.

United States

Manufacturing PMI by Markit – preliminary estimate

Manufacturing activity in the United States probably remained little changed in February, with the corresponding preliminary Purchasing Managers Index coming in at a reading of 53.8. In January and December the final seasonally adjusted PMI stood at 53.9, which has been the lowest reading since January 2014, when the indicator was reported at 53.7. In January output growth rebounded, while new orders slowed and input prices fell for the first time in two-and-a-half years.

According to Markits statement: ”Survey respondents noted that improving economic conditions had boosted sales at the start of the year, but export demand remained subdued. There were also reports from investment goods producers that weaker spending patterns among clients in the oil and gas sector had contributed to weaker new business growth.”

”The latest survey indicated a reduction in manufacturers’ average cost burdens for the first time in two-and-a-half years. Anecdotal evidence attributed the slight fall in input costs to lower fuel, energy and commodity prices at the start of 2015. Meanwhile, average prices charged by U.S. manufacturing companies increased marginally, but the rate of inflation was only slightly faster than the seven-month low registered in December.”

Values above the key level of 50.0 indicate optimism (expanding activity). Lower-than-expected PMI readings would certainly have a bearish effect on the US dollar. The preliminary data by Markit Economics is due out at 14:45 GMT.

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.5427. In case GBP/USD manages to breach the first resistance level at 1.5452, it will probably continue up to test 1.5492. In case the second key resistance is broken, the pair will probably attempt to advance to 1.5517.

If GBP/USD manages to breach the first key support at 1.5387, it will probably continue to slide and test 1.5362. With this second key support broken, the movement to the downside will probably continue to 1.5322.

The mid-Pivot levels for today are as follows: M1 – 1.5342, M2 – 1.5375, M3 – 1.5407, M4 – 1.5440, M5 – 1.5472, M6 – 1.5505.

In weekly terms, the central pivot point is at 1.5340. The three key resistance levels are as follows: R1 – 1.5484, R2 – 1.5570, R3 – 1.5714. The three key support levels are: S1 – 1.5254, S2 – 1.5110, S3 – 1.5024.