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Forex Market: GBP/USD trading outlook for May 9th

Friday’s trade saw GBP/USD within the range of 1.4415-1.4543. The pair closed at 1.4430, shedding 0.39% on a daily basis. It has been the 16th drop in the past 31 trading days and also a fourth consecutive one. The daily low has been the lowest level since April 25th, when a low of 1.4400 was registered. In weekly terms, GBP/USD lost 1.25% of its value during the current week. It has been the 8th drop in the past 18 weeks and also the steepest one since the week ended on March 27th. The major pair has increased its slump to 1.25% so far during the current month, following two consecutive months of advance. In April it went up 1.75%.

No relevant macroeconomic reports and other events, which may influence GBP/USD trading, are scheduled on Monday (May 9th).

Correlation with other Majors

Taking into account the business week ended on May 6th 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 (0.9989, or very strong)
GBP/USD to AUD/USD (0.9901, or very strong)
GBP/USD to EUR/USD (0.8326, or very strong)
GBP/USD to USD/CHF (-0.7437, or strong)
GBP/USD to USD/JPY (-0.8679, or very strong)
GBP/USD to USD/CAD (-0.9800, or very strong)

1. During the examined period GBP/USD moved almost equally in one and the same direction with EUR/USD, AUD/USD and NZD/USD. This relationship has been the most pronounced between GBP/USD and NZD/USD, with the correlation between these two majors being almost perfect.

2. GBP/USD moved almost equally in the opposite direction compared to USD/JPY and USD/CAD during the week. This relationship has been the most pronounced between GBP/USD and USD/CAD, with the correlation between the two major pairs being almost perfect.

3. GBP/USD moved strongly in the opposite direction compared to USD/CHF during the period in question.

Daily and Weekly Pivot Levels

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

Central Pivot Point – 1.4463
R1 – 1.4510
R2 – 1.4591
R3 – 1.4638

S1 – 1.4382
S2 – 1.4335
S3 – 1.4254

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

Central Pivot Point – 1.4538
R1 – 1.4661
R2 – 1.4892
R3 – 1.5015

S1 – 1.4307
S2 – 1.4184
S3 – 1.3953

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