Friday’s trade saw GBP/USD within the range of 1.4408-1.4517. The pair closed at 1.4481, inching up 0.01% on a daily basis. It has been the 26th gain in the past 55 trading days and also a third consecutive one. The daily high has been the highest level since February 16th, when a high of 1.4518 was registered. In weekly terms, GBP/USD added 0.65% to its value in the past week. It has been the 6th gain in the past 11 weeks and also a third consecutive one. GBP/USD has trimmed gains to 3.63% so far during the current month, following four consecutive months of decline.
At 7:22 GMT today GBP/USD was losing 0.43% for the day to trade at 1.4421. The pair touched a daily low at 1.4408 at 6:44 GMT, overshooting the lower range breakout level (S4), and a daily high at 1.4468 during the early phase of the Asian trading session.
On Monday GBP/USD trading may be influenced by the following macroeconomic reports as listed below.
Fundamentals
United Kingdom
CBI Industrial Trends Survey
At 11:00 GMT the Confederation of British Industry (CBI) will announce the results from its March survey, encompassing 17 major industries. The gauge of industrial orders in the UK stood in negative territory for a 10th consecutive period in the three months to February, as it came in at a reading of -17, falling from -15 in the three months to January. Februarys reading has been the lowest since October 2015.
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 countrys industry. The Industrial Trends Survey by the Confederation of British Industry 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 pessimism for an 11th consecutive period, this would have a limited bearish effect on the sterling.
United States
Existing Home Sales
The index of existing home sales in the United States probably dropped 1.3% to a level of 5.40 million in February compared to January, according to the median estimate by experts. In January sales were 0.4% higher from a month ago to reach 5.47 million, or the highest level since July 2015, when a figure of 5.48 million was reported. Sales of new single-family houses rose 1% during the month, while sales of condos were down 4.7%. The median sales price dropped 3.2% in January.
In case the index decreased at a steeper monthly rate than anticipated, this would have a moderate bearish effect on the US dollar. The National Association of Realtors (NAR) is to release the official figure at 14:00 GMT.
Correlation with other Majors
Taking into account the week ended on March 18th and the daily closing levels of the major currency pairs, we come to the following conclusions in regard to the strength of relationship:
GBP/USD to NZD/USD (0.9375, or very strong)
GBP/USD to AUD/USD (0.9311, or very strong)
GBP/USD to EUR/USD (0.8242, or very strong)
GBP/USD to USD/JPY (-0.7906, or strong)
GBP/USD to USD/CHF (-0.8595, or very strong)
GBP/USD to USD/CAD (-0.8896, or very strong)
1. During the examined period GBP/USD moved strongly in the opposite direction compared to USD/JPY.
2. GBP/USD moved almost equally in one and the same direction with EUR/USD, AUD/USD and NZD/USD during the past week. This relationship has been the most pronounced between GBP/USD and NZD/USD.
3. GBP/USD moved almost equally in the opposite direction compared to USD/CHF and USD/CAD during the period in question. This relationship has been the most pronounced between GBP/USD and USD/CAD.
Daily and Weekly Pivot Levels
By employing the Camarilla calculation method, the daily pivot levels for GBP/USD are presented as follows:
R1 – 1.4491
R2 – 1.4501
R3 (range resistance) – 1.4511
R4 (range breakout) – 1.4541
S1 – 1.4471
S2 – 1.4460
S3 (range support) – 1.4451
S4 (range breakout) – 1.4421
By using the traditional method of calculation, the weekly pivot levels for GBP/USD are presented as follows:
Central Pivot Point – 1.4350
R1 – 1.4648
R2 – 1.4816
R3 – 1.5114
S1 – 1.4182
S2 – 1.3884
S3 – 1.3716
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