Yesterday’s trade saw GBP/USD within the range of 1.4058-1.4298. The pair closed at 1.4149, plummeting 1.78% on a daily basis. It has been the 22nd drop in the past 36 trading days and also the sharpest one in at least 5 years. The daily low has been the lowest level since March 18th 2009, when a low of 1.3847 was registered.
At 7:26 GMT today GBP/USD was losing 0.32% for the day to trade at 1.4104. The pair touched a daily low at 1.4091 at 7:01 GMT, undershooting the range support level (S3), and a daily high at 1.4156 during the early phase of the Asian trading session.
On Monday the sterling lost ground sharply against its major peers, after London Mayor Boris Johnson expressed his support of Great Britain leaving the European Union. The announcement was largely considered as heightening the chance of a Brexit, with betting odds for such a scenario rising to 33% from 29% previously, bookmakers said.
”I will be advocating Vote Leave … because I want a better deal for the people of this country, to save them money and to take control. That is really what this is all about.”, Boris Johnson stressed on Sunday.
On Tuesday GBP/USD trading may be influenced by the following macroeconomic reports as listed below.
Fundamentals
United States
S&P/Case-Shiller House Price Index
At 14:00 GMT Standard & Poors will report on the performance of its House Price Index, which measures the change in prices of single-family homes in 20 metropolitan areas across the US. The report serves as a gauge of the US housing markets health. According to the median estimate by experts, home prices in the 20 areas probably rose 5.8% in December compared to December 2014, while matching the rate in November. If expectations were met, Decembers rate of increase would be the sharpest one since July 2014, when home prices climbed 6.7% year-on-year. Within a recovering economy, a sharper-than-projected gain in prices will usually have a moderate bullish effect on the local currency.
Existing Home Sales
The index of existing home sales in the United States probably dropped 2.9% to a level of 5.35 million in January compared to December, according to the median estimate by experts. In December sales were 14.7% higher from a month ago to reach 5.46 million, or the highest level since September 2015, when a figure of 5.55 million was reported. Sales of new single-family houses rose 16.1% during the month, while sales of condos were up 4.9%. The median sales price climbed 1.9% in December.
In case the index dropped at a steeper monthly rate than anticipated, this would have a limited bearish effect on the US dollar. The National Association of Realtors (NAR) is to release the official figure at 15:00 GMT.
Consumer Confidence Index by the CB
Confidence among consumers in the United States probably worsened in February, with the corresponding index coming in at a reading of 97.3, according to market expectations, down from 98.1 in January. The latter has been the highest level of confidence since September 2015.
This indicator measures the level of individuals confidence in the US economic development. It is considered as a leading indicator, as it gives an early insight into consumer spending, which accounts for most of the nations GDP.
In case the index fell more than expected, this would have a strong bearish effect on the US dollar, as lower confidence suggests a lesser willingness to spend and, respectively, a slower economic growth. The Conference Board research group is to publish the official index reading at 15:00 GMT.
Daily and Weekly Pivot Levels
By employing the Camarilla calculation method, the daily pivot levels for GBP/USD are presented as follows:
R1 – 1.4171
R2 – 1.4193
R3 (range resistance) – 1.4215
R4 (range breakout) – 1.4281
S1 – 1.4127
S2 – 1.4105
S3 (range support) – 1.4082
S4 (range breakout) – 1.4017
By using the traditional method of calculation, the weekly pivot levels for GBP/USD are presented as follows:
Central Pivot Point – 1.4392
R1 – 1.4552
R2 – 1.4697
R3 – 1.4857
S1 – 1.4247
S2 – 1.4087
S3 – 1.3942
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