Yesterday’s trade saw GBP/USD within the range of 1.3876-1.4029. The pair closed at 1.3929, losing 0.66% on a daily basis. It has been the 24th drop in the past 38 trading days and also the third consecutive one. In addition, the daily low has been the lowest level since March 18th 2009, when a low of 1.3847 was registered.
At 7:20 GMT today GBP/USD was inching down 0.04% for the day to trade at 1.3923. The pair touched a daily low at 1.3914 at 7:15 GMT, overshooting the daily S1 level, and a daily high at 1.3954 at 4:40 GMT.
On Thursday GBP/USD trading may be influenced by the following macroeconomic reports as listed below.
Fundamentals
United Kingdom
Gross Domestic Product – second estimate
The second estimate of United Kingdoms GDP probably confirmed the preliminary estimate, released on January 28th, that economy expanded at a rate of 1.9% during the final quarter of 2015 compared to the same period a year ago. It has been the slowest GDP growth rate since Q3 2013, when economy expanded 1.9%. UK GDP grew at an annualized rate of 2.1% in the third quarter, down from a second estimate, pointing to a 2.3% growth.
According to the preliminary data, UK services sector grew 2.2% year-on-year in Q4, decelerating from a 2.4% growth during the third quarter, while UK industry expanded 1.1% year-on-year, also slowing down from a 1.4% growth in Q2 and Q3. The nations manufacturing output contracted 1% during the final quarter of 2015, which has been a second consecutive period of decrease. Output in the electricity, gas, steam and air segment rose 2% in Q4, recovering from a 0.5% drop in the preceding quarter, while mining output expanded 10%, slowing down from a 12.2% growth in Q3. UK agricultural sector, on the other hand, contracted 1.8% in Q4, following a 0.1% decrease in the prior three months, according to provisional data by the Office for National Statistics (ONS).
On a quarterly basis, the second estimate of UK GDP probably also matched the preliminary estimate of a 0.5% growth during Q4, following a 0.4% expansion during the third quarter. The latter has been the slowest quarterly growth since Q1 2015, when UK GDP rose 0.4%.
In case the annual economic growth slowed down more than anticipated in Q4, this would have a strong bearish effect on the sterling. The Office for National Statistics is expected to release the second GDP estimate at 9:30 GMT.
United States
Initial, Continuing Jobless Claims
The number of people in the United States, who filed for unemployment assistance for the first time during the business week ended on February 19th, probably increased to 270 000, according to market expectations, from 262 000 reported in the preceding week. The latter has been the lowest number of claims since the business week ended on November 20th, when 260 000 claims were reported.
The 4-week moving average, an indicator lacking seasonal effects, was 273 250, marking a decrease by 8 000 compared to the preceding weeks unrevised average.
The business week, which ended on February 12th has been the 49th consecutive week, when jobless claims stood below the 300 000 threshold, which implied a healthy labor market.
Initial jobless claims number is a short-term indicator, reflecting lay-offs in the country. In case the number of claims met expectations or rose further, this would have a moderate bearish effect on the US dollar.
The number of continuing jobless claims probably decreased to the seasonally adjusted 2 260 000 during the business week ended on February 12th from 2 273 000 in the preceding week. The latter represented an increase by 30 000 compared to the revised up number of claims reported in the week ended on January 29th. This indicator reflects the actual number of people unemployed and currently receiving unemployment benefits, who filed for unemployment assistance at least two weeks ago.
The Department of Labor is to release the weekly report at 13:30 GMT.
Durable Goods Orders
Durable goods orders in the United States probably increased 2.5% in January from a month ago, according to the median forecast by experts, following a revised up 5.0% drop in December. If expectations were met, Januarys rate of increase would be the strongest since October 2015, when orders were up 3.0%.
The value of shipments of manufactured durable goods, up in two of the past three months, decreased 2.2% (or USD 5.4 billion) in December to reach USD 235.8 billion. The value of unfilled orders for manufactured durable goods, down for the first time in three months, fell 0.5% (or USD 5.6 billion) in December to reach USD 1,187.6 billion. At the same time, the value of inventories of manufactured durable goods, up for the first time in the past six months, rose 0.5% (or USD 2.1 billion) during the period to USD 397.9 billion, according to data by the US Census Bureau.
Non-defense new orders for capital goods shrank 15.0% (or USD 11.3 billion) in December to USD 64.4 billion, while defense new orders for capital goods dropped 34.4% (or USD 4.9 billion) during the month to USD 9.3 billion.
Durable goods orders, which exclude transportation, probably rose 0.2% in January from a month ago, according to expectations, following a 1.2% slump in December. The latter has been the most considerable monthly drop since December 2013, when core orders were down at a revised up 1.3%. Large ticket orders, such as automobiles for civil use or aircraft, are not present in the calculation, as their value may be in a wide range. This way the index provides a more reliable information in regard to orders for durable goods.
In case the general index rose at a faster-than-projected pace, this would have a strong bullish effect on the US dollar, due to positive implications in regard to the wider gauge of production, factory orders. The US Census Bureau is scheduled to release the official report at 13:30 GMT.
Daily and Weekly Pivot Levels
By employing the Camarilla calculation method, the daily pivot levels for GBP/USD are presented as follows:
R1 – 1.3943
R2 – 1.3957
R3 (range resistance) – 1.3971
R4 (range breakout) – 1.4013
S1 – 1.3915
S2 – 1.3900
S3 (range support) – 1.3887
S4 (range breakout) – 1.3845
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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