Forex Market: GBP/USD daily trading outlook

Yesterday’s trade saw GBP/USD within the range of 1.4123-1.4279. The pair closed at 1.4156, falling 0.75% on a daily basis. It has been the 37th drop in the past 67 trading days. The daily low has been the lowest level since March 28th, when a low of 1.4116 was registered. GBP/USD has extended its drop to 1.59% so far during the current month, following a 3.20% surge in March.

At 6:42 GMT today GBP/USD was edging down 0.27% for the day to trade at 1.4118. The pair touched a daily low at 1.4115 at 6:41 GMT, making an exact test of the daily S2 level, and a daily high at 1.4171 during the early phase of the Asian trading session.

On Wednesday GBP/USD trading may be influenced by the following release listed below.

Fundamentals

United States

FOMC Minutes

At 18:00 GMT the Federal Open Market Committee (FOMC) will release the minutes from its meeting on policy held on March 15th-16th. The minutes offer detailed insights on FOMC’s monetary policy stance. This release is closely examined by traders, as it may provide clues over interest rate decisions in the future. High volatility is usually present after the publication.

During her statement at the Economic Club of New York Federal Reserve Chair Janet Yellen used a rather dovish tone, saying that future policy adjustments need to be cautious, because of uncertainty regarding growth and inflation outlook as well as market turbulence. According to extracts from her speech on March 29th: “…this expectation of fading headwinds and a rising neutral rate is a key reason for the FOMC’s assessment that gradual increases in the federal funds rate over time will likely be appropriate. That said, this assessment is only a forecast. The future path of the federal funds rate is necessarily uncertain because economic activity and inflation will likely evolve in unexpected ways.”

“In particular, developments abroad imply that meeting our objectives for employment and inflation will likely require a somewhat lower path for the federal funds rate than was anticipated in December.”

“If economic conditions were to strengthen considerably more than currently expected, the FOMC could readily raise its target range for the federal funds rate to stabilize the economy. By contrast, if the expansion was to falter or if inflation was to remain stubbornly low, the FOMC would be able to provide only a modest degree of additional stimulus by cutting the federal funds rate back to near zero.”

Daily and Weekly Pivot Levels

By employing the Camarilla calculation method, the daily pivot levels for GBP/USD are presented as follows:

R1 – 1.4170
R2 – 1.4185
R3 (range resistance) – 1.4200
R4 (range breakout) – 1.4242

S1 – 1.4142
S2 – 1.4127
S3 (range support) – 1.4113
S4 (range breakout) – 1.4070

By using the traditional method of calculation, the weekly pivot levels for GBP/USD are presented as follows:

Central Pivot Point – 1.4268
R1 – 1.4415
R2 – 1.4607
R3 – 1.4754

S1 – 1.4076
S2 – 1.3929
S3 – 1.3737