Friday’s trade (in GMT terms) saw GBP/USD within the range of 1.3079-1.3287. The pair closed at 1.3111, plummeting 0.93% compared to Thursdays close. It has been the 162nd drop in the past 300 trading days. The daily high has been the highest level since July 18th, when a high of 1.3313 was registered. In weekly terms, GBP/USD lost 0.62% of its value during the prior week. It has been the 15th drop in the past 29 weeks. The major pair has extended its slump to 1.37% so far during the current month, after depreciating 8.06% in June.
At 7:06 GMT today GBP/USD was edging up 0.18% on the day to trade at 1.3134. The pair touched a daily high at 1.3146 during the early phase of the European trading session, undershooting the daily R2 level, and a daily low at 1.3110 during early Asian trade.
No relevant macroeconomic reports and other events, which may influence GBP/USD trading, are scheduled on Monday (July 25th).
Correlation with other Majors
Taking into account the business week ended on July 22nd 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 EUR/USD (0.7392, or strong)
GBP/USD to AUD/USD (0.6003, or strong)
GBP/USD to NZD/USD (0.3705, or moderate)
GBP/USD to USD/JPY (0.0841, or very weak)
GBP/USD to USD/CAD (-0.4717, or moderate)
GBP/USD to USD/CHF (-0.5717, or strong)
1. During the examined period GBP/USD moved strongly in one and the same direction with AUD/USD and EUR/USD, while moving strongly in the opposite direction compared to USD/CHF.
2. GBP/USD moved almost independently compared to USD/JPY during the past week.
3. GBP/USD moved to a moderate extent in one and the same direction with NZD/USD during the period in question, while moving to a moderate extent in the opposite direction compared to USD/CAD.
Bond Yield Spread
The yield on UK 2-year government bonds went as high as 0.180% on July 22nd, after which it closed at 0.135% to lose 3.4 basis points (0.034 percentage point) compared to July 21st.
Meanwhile, the yield on US 2-year government bonds climbed as high as 0.719% on July 22nd, after which it fell to 0.707% at the close to add 2.5 basis points (0.025 percentage point) compared to July 21st.
The spread between 2-year US and 2-year UK bond yields, which reflects the flow of funds in a short term, widened to 0.572% on July 22nd from 0.513% on July 21st. The July 22nd yield spread has been the highest one so far this year.
Daily, Weekly and Monthly Pivot Levels
By employing the Camarilla calculation method, the daily levels of importance for GBP/USD are presented as follows:
R1 – 1.3130
R2 – 1.3149
R3 (Range Resistance – Sell) – 1.3168
R4 (Long Breakout) – 1.3225
R5 (Breakout Target 1) – 1.3292
R6 (Breakout Target 2) – 1.3320
S1 – 1.3092
S2 – 1.3073
S3 (Range Support – Buy) – 1.3054
S4 (Short Breakout) – 1.2997
S5 (Breakout Target 1) – 1.2930
S6 (Breakout Target 2) – 1.2902
By using the traditional method of calculation, the weekly levels of importance for GBP/USD are presented as follows:
Central Pivot Point – 1.3163
R1 – 1.3264
R2 – 1.3418
R3 – 1.3519
R4 – 1.3621
S1 – 1.3009
S2 – 1.2908
S3 – 1.2754
S4 – 1.2601
In monthly terms, for GBP/USD we have the following pivots:
Central Pivot Point – 1.3817
R1 – 1.4517
R2 – 1.5722
R3 – 1.6422
R4 – 1.7121
S1 – 1.2612
S2 – 1.1912
S3 – 1.0707
S4 – 0.9501
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