Yesterday’s trade saw GBP/USD within the range of 1.4386-1.4507. The pair closed at 1.4419, shedding 0.41% compared to Tuesdays close. It has been the 29th drop in the past 49 trading days and also a second consecutive one. The daily low has been the lowest level since May 16th, when a low of 1.4330 was registered. The major pair has lost 0.35% of its value so far in June, following a 0.92% slump in the prior month.
At 6:20 GMT today GBP/USD was inching up 0.09% on the day to trade at 1.4432. The pair touched a daily high at 1.4442 during late Asian trade, overshooting the daily R1 level, and a daily low at 1.4407 during the early phase of the Asian trading session.
On Thursday GBP/USD trading may be influenced by the following macroeconomic reports and other events as listed below.
Fundamentals
United Kingdom
Construction PMI
Activity in United Kingdom’s sector of construction probably increased at the same rate in May compared to a month ago, with the corresponding Purchasing Managers Index coming in at a reading of 52.0, according to market expectations. If so, May would be the 37th consecutive month, when the gauge inhabited the area above 50.0. The index is based on a survey, encompassing managers of companies, operating in the construction sector. They are asked about their estimate regarding current business conditions (new orders, output, employment, demand in the future). Values above the key level of 50.0 signify predominant optimism in regard to business conditions. In case the PMI outpaced expectations in May, this would have a limited-to-moderate bullish effect on the sterling. The Chartered Institute of Purchasing and Supply (CIPS) is to release the official index reading at 8:30 GMT.
BoEs Carney statement
At 13:00 GMT Bank of Englands Governor, Mark Carney, is expected to take a statement. Any remarks on monetary policy, or the upcoming EU membership referendum would certainly heighten volatility of currency pairs containing the Pound.
United States
Employment Change by ADP
Employers in the US non-farm private sector probably added 175 000 new jobs during May, according to the median estimate by experts, following 156 000 new positions added in March. The latter has been the lowest job growth since April 2013, when a revised down number of 131 000 jobs was reported.
Employment in the goods-producing sector dropped by 11 000, while employment in the services increased by 166 000. Manufacturing employment decreased by 13 000, while employment in construction grew by 14 000, in professional/business activities – by 27 000, in trade – by 25 000 and in financial activities – by 4 000.
The employment report by Automated Data Processing Inc. (ADP) is based on data that encompasses 400 000 – 500 000 companies employing over 24 million people, working in the 19 major sectors of the economy. The ADP employment change indicator is calculated in accordance with the same methodology, which the Bureau of Labor Statistics (BLS) uses. Published two days ahead of the governments employment statistics, this report is used by traders as a reliable predictor of the official non-farm payrolls data. Creation of jobs has a direct link to consumer spending, while the latter is a major driving force behind the US economic growth. In case new jobs growth outpaced expectations, this would have a moderate-to-strong bullish effect on the US dollar. The official figure is scheduled to be released at 12:15 GMT.
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 May 27th, probably rose to 270 000, according to market consensus, from 268 000 in the preceding week. The latter has been the lowest number of claims since the business week ended on April 28th, when an unrevised level of 257 000 was reported.
The 4-week moving average, an indicator lacking seasonal effects, was 278 500, marking an increase by 7 250 compared to the preceding weeks unrevised average.
The business week, which ended on May 20th has been the 64th consecutive week, when jobless claims stood below the 300 000 threshold, which suggested a healthy labor market. It has been the longest streak in 43 years.
Initial jobless claims number is a short-term indicator, reflecting lay-offs in the country. In case the number of claims met expectations or increased further, this would have a moderate bearish effect on the US dollar.
The number of continuing jobless claims probably dropped to the seasonally adjusted 2 150 000 during the business week ended on May 20th, according to the median forecast by experts, from 2 163 000 in the preceding week. The latter represented an increase by 10 000 compared to the revised up number of claims reported in the week ended on May 6th. 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 US Department of Labor is to release the weekly report at 12:30 GMT.
Fed speakers
At 12:35 GMT FOMC member, Jerome Powell, is expected to take a statement, followed by two other members of the Committee – the Fed President for New York, William Dudley, at 15:30 GMT and the Fed President for Dallas, Robert Kaplan, at 17:00 GMT. Their remarks will be closely watched for hints regarding the Feds future policy stance.
Daily and Weekly Pivot Levels
By employing the Camarilla calculation method, the daily pivot levels for GBP/USD are presented as follows:
R1 – 1.4430
R2 – 1.4441
R3 (range resistance) – 1.4452
R4 (range breakout) – 1.4486
S1 – 1.4408
S2 – 1.4397
S3 (range support) – 1.4386
S4 (range breakout) – 1.4352
By using the traditional method of calculation, the weekly pivot levels for GBP/USD are presented as follows:
Central Pivot Point – 1.4603
R1 – 1.4765
R2 – 1.4906
R3 – 1.5068
S1 – 1.4462
S2 – 1.4300
S3 – 1.4159
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