Forex Market: GBP/USD trading forecast for Monday

Friday’s trade saw GBP/USD within the range of 1.4720-1.4990. The pair closed at 1.4951, gaining 1.35% on a daily basis. The cross appreciated 1.40% for the whole week, which followed two consecutive weeks of losses. This has also been the most considerable weekly gain since the week starting February 9th 2014, when the pair rose 2.04%.

Fundamentals

United Kingdom

CBI Industrial Trends Survey

The gauge of industrial orders in the United Kingdom probably slipped to a reading of 9 during the three months to March, according to expectations, from 10 in the three-month period to February. The latter has been the highest reading since the period to August 2014, when a value of 11 was reported. This indicator reflects the net balance between companies, that registered an increase in industrial orders during the respective period of three months and those, that registered a drop. It is the oldest indicator, released from the UK private sector, to show the development tendency in the country’s industry. The Industrial Trends Survey by the Confederation of British Industry (CBI) provides expert qualitative opinion from senior manufacturing executives, on past and expected trends in output, exports, prices, costs, investment intentions, business confidence and capacity utilization. A level above zero suggests that volume of orders is projected to increase, while a level below zero indicates that expectations point to lower volumes. If the survey showed predominant optimism, this would have a limited bullish effect on the sterling. The CBI will announce the results from its survey, encompassing 17 industries, at 11:00 GMT.

United States

Existing Home Sales

The index of existing home sales in the United States probably gained 1.8% to a level of 4.90 million in February compared to a month earlier. In January compared to December existing home sales dropped 4.9% to 4.82 million, or the lowest level since April 2014, when sales amounted to 4.66 million homes.

The sample of data encompasses condos, co-ops and single-family houses.

Statistical data on existing home sales is often used along with statistical figures regarding the new home sales and pending home sales, with the major objective being to draw a conclusion how nation’s housing sector is performing, regardless of interest rates. The most active house-purchasing period in the United States is usually between the months of March through June. Therefore, in case statistical data revealed a sudden drop in the number of homes sold rather than an improvement during this period, this would be considered as a signal of weakness in the country’s housing market.

The report on existing home sales usually does not cause a real direct impact on US economy. Actually, this effect appears to be limited, due to the fact that nothing is produced with the mere sale of an existing home. In terms of economic activity, the sale of an existing house may be related only to interior design and purchases of new furniture.

In case the index increased more than anticipated, this would have a bullish effect on the US dollar. The National Association of Realtors (NAR) is to release the official figure at 14:00 GMT.

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.4887. In case GBP/USD manages to breach the first resistance level at 1.5054, it will probably continue up to test 1.5157. In case the second key resistance is broken, the pair will probably attempt to advance to 1.5324.

If GBP/USD manages to breach the first key support at 1.4784, it will probably continue to slide and test 1.4617. With this second key support broken, the movement to the downside will probably continue to 1.4514.

The mid-Pivot levels for Monday are as follows: M1 – 1.4566, M2 – 1.4701, M3 – 1.4836, M4 – 1.4971, M5 – 1.5106, M6 – 1.5241.

In weekly terms, the central pivot point is at 1.4911. The three key resistance levels are as follows: R1 – 1.5189, R2 – 1.5428, R3 – 1.5706. The three key support levels are: S1 – 1.4672, S2 – 1.4394, S3 – 1.4155.