Forex Market: GBP/USD daily trading outlook

Yesterday’s trade saw GBP/USD within the range of 1.4013-1.4294. The pair closed at 1.4293, rising 0.62% compared to Wednesdays close. It has been the 26th gain in the past 60 trading days and also a second consecutive one. The daily low has been the lowest level since April 6th, when a low of 1.4004 was registered. The major pair has fallen 1.70% so far in June, following a 0.92% drop in the prior month.

At 6:31 GMT today GBP/USD was losing 0.41% on the day to trade at 1.4235. The pair touched a daily high at 1.4295 during the early phase of the Asian trading session and a daily low at 1.4199 in early Asian trade as well.

On Friday GBP/USD trading may be influenced by the following macroeconomic reports as listed below.

Fundamentals

United States

Housing Starts, Building Permits

The number of housing starts in the United States probably fell 1.9% to 1.150 million units in May, according to market expectations, from the seasonally adjusted annual rate of 1.172 million during the prior month. The latter has been the highest number of starts since February, when a revised up level of 1.194 million was reported. In April, starts of single-family houses increased at a monthly rate of 3.3% to 778 000, while starts of buildings with five units or more rose 10.7% to reach 373 000. In April, housing starts marked the largest increase in the Midwest (up 22.2%), followed by starts in the South (up 14.1%). On the other hand, housing starts fell the most in the West (down 10%), followed by starts in the Northeast (down 7.6%).

Housing starts represent a gauge to measure residential units, on which construction has already begun every month. A start in construction is defined as the foundation laying of a building and it encompasses residential housing primarily.

Meanwhile, the number of building permits in the country probably went up 3% to 1.150 million in May from an annual level of 1.116 million in April. If expectations were met, this would be the highest level since February, when the revised up 1.177 million units were reported. Single-family authorizations rose at a monthly rate of 1.5% to reach 736 000 units in April, while permits of units in buildings with five units or more were reported to have increased 9.4% to 348 000.

Building permits are permits, issued in order to allow excavation. An increase in the number of building permits and housing starts usually occurs a few months after mortgage rates in the country have been reduced. Authorizations are not required in all regions of the United States. Building permits, as an indicator, also provide clues in regard to demand in the US housing market. In case a higher-than-anticipated figure was reported, this would have a moderate bullish effect on the US dollar. The official housing data are due out at 12:30 GMT.

Daily, Weekly and Monthly Pivot Levels

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

R1 – 1.4319
R2 – 1.4345
R3 (range resistance) – 1.4370
R4 (range breakout) – 1.4448

S1 – 1.4267
S2 – 1.4241
S3 (range support) – 1.4216
S4 (range breakout) – 1.4138

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

Central Pivot Point – 1.4360
R1 – 1.4543
R2 – 1.4828
R3 – 1.5011

S1 – 1.4075
S2 – 1.3892
S3 – 1.3607

In monthly terms, for GBP/USD we have the following pivots:

Central Pivot Point – 1.4526
R1 – 1.4722
R2 – 1.4966
R3 – 1.5162

S1 – 1.4282
S2 – 1.4086
S3 – 1.3842