Yesterday’s trade saw GBP/USD within the range of 1.4404-1.4520. The pair closed at 1.4487, advancing 0.58% on a daily basis. It has been the 11th gain in the past 22 trading days and also a second consecutive one. The daily high has been the highest level since February 15th, when a high of 1.4537 was registered. GBP/USD has added 0.94% to its value so far during the current month, following a 3.20% surge in March.
At 7:06 GMT today GBP/USD was edging up 0.11% on the day to trade at 1.4503. The pair touched a daily high at 1.4509 during the early phase of the Asian trading session, overshooting the daily R2 level, and a daily low at 1.4480 again during early Asian trade.
On Tuesday GBP/USD trading may be influenced by the following macroeconomic reports as listed below.
Fundamentals
United Kingdom
BBA Home Loans
The number of home loans in the United Kingdom, issued by the British Bankers’ Association (BBA), probably increased to 46 100 in March, according to market expectations, from 45 892 in February. The BBA features the major banks in the country, which account for almost 60% of overall mortgage lending. The number of mortgage loans is considered as a leading indicator in regard to UK housing market conditions. As growth in mortgage lending signifies a healthy housing sector, which also contributes to overall economic activity, in case the number of loans rose more than projected, this would boost demand for the sterling. The BBA is to publish the official figure at 8:30 GMT.
United States
Durable Goods Orders
The value of durable goods orders in the United States probably rose 1.8% in March from a month ago, according to the median forecast by experts, following a revised down 3.0% drop in February.
The value of shipments of manufactured durable goods, down in two of the past three months, dropped 0.9% (or USD 2.1 billion) in February to reach USD 238.3 billion. The value of unfilled orders for manufactured durable goods, down in two of the past three months, fell 0.4% (or USD 4.2 billion) in February to reach USD 1,183.7 billion. At the same time, the value of inventories of manufactured durable goods, down in seven of the past eight months, shrank 0.3% (or USD 1.1 billion) during the period to USD 394.3 billion, according to data by the US Census Bureau.
Non-defense new orders for capital goods dropped 7.5% (or USD 5.9 billion) in February to USD 72.7 billion, while defense new orders for capital goods shrank 25.6% (or USD 2.6 billion) during the month to USD 7.5 billion.
Durable goods orders, as an indicator, gauge the strength of US manufacturing sector and represent a major portion of the nations factory orders. This is a closely watched report on manufacturing activity, because durable goods are the first type of goods to be affected by an economic downturn or upturn.
The value of durable goods orders, excluding transportation, probably rose 0.5% in March from a month ago, according to expectations, following a revised down 1.3% slump in February. The latter has been the largest monthly decrease 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 12:30 GMT.
Services PMI by Markit – preliminary reading
Activity in the US sector of services probably increased at a faster rate in April from a month ago, with the corresponding preliminary Purchasing Managers Index coming in at a reading of 52.3, according to expectations. In March the services PMI was reported at a final 51.3, improving from a preliminary reading of 51.0. According to Markit, in March new work increased at a record low rate, because of uncertainty over US economic outlook and cautious spending patterns. Input cost inflation remained lower, while output costs registered a marginal increase.
The PMI is based on data collected from a representative panel of more than 400 private sector companies, which encompasses industries such as transport and communication, financial intermediaries, business and personal services, computing & IT and hotels & restaurants. Values above the key level of 50.0 indicate predominant optimism (expansion in general activity). In case a faster than-expected expansion in services sector activity is reported, this would have a moderate bullish effect on the US dollar, as services contribute to a considerable portion of the US GDP. The preliminary reading by Markit Economics is due out at 13:45 GMT.
CB Consumer Confidence Index
Confidence among consumers in the United States probably lowered in April, with the corresponding index coming in at a reading of 96.0, according to market expectations. In March the gauge was reported at 96.2, or the highest since January.
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 a major part of the nations GDP.
In case the index slowed down more than anticipated, 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 14:00 GMT.
Daily and Weekly Pivot Levels
By employing the Camarilla calculation method, the daily pivot levels for GBP/USD are presented as follows:
R1 – 1.4498
R2 – 1.4508
R3 (range resistance) – 1.4519
R4 (range breakout) – 1.4551
S1 – 1.4476
S2 – 1.4466
S3 (range support) – 1.4455
S4 (range breakout) – 1.4423
By using the traditional method of calculation, the weekly pivot levels for GBP/USD are presented as follows:
Central Pivot Point – 1.4328
R1 – 1.4526
R2 – 1.4650
R3 – 1.4848
S1 – 1.4204
S2 – 1.4006
S3 – 1.3882
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