Yesterday’s trade (in GMT terms) saw GBP/USD within the range of 1.2956-1.3051. The pair closed at 1.3002, shedding 0.30% compared to Mondays close. It has been the 170th drop in the past 312 trading days and also a fifth consecutive one. The daily low has been the lowest level since July 11th, when a low of 1.2851 was registered. The major pair has extended its decline to 1.74% so far during the current month, after losing 0.59% of its value in July.
At 6:58 GMT today GBP/USD was edging up 0.25% on the day to trade at 1.3034. The pair touched a daily high at 1.3092 during the early phase of the Asian trading session, overshooting the upper range breakout level (R4), and a daily low at 1.2994 during early Asian trade as well.
GBP/USD fell below the 1.3000 mark for the first time since mid-July on Tuesday, following remarks made by BoE Monetary Policy Committee member, Ian McCafferty, in ”The Times”. He noted that the central bank might boost the easing package it unveiled last week, in case the UK economy slowed down in line with what sentiment surveys have showed.
On Wednesday GBP/USD trading may be influenced by the following macroeconomic reports as listed below.
Fundamentals
United States
Job Openings
The number of job openings in the United States probably rose to 5.574 million in June, according to the median forecast by experts, from 5.500 million during the preceding month. In May, the number of positions waiting to be filled dropped in wholesale trade (-104 000), other services (-98 000) and real estate and rental and leasing (-53 000).
This indicator refers to all job positions that are open, but not filled on the last business day of the month. Job openings are part of the Job Openings and Labor Turnover Survey (JOLTS), which gathers data from about 16 400 non-farm establishments including retailers and manufacturers, as well as federal, state, and local government entities in the 50 states and the District of Columbia. The survey assesses the unmet demand for labor in the labor market. A higher-than-projected level of job openings will usually have a limited bullish effect on the US Dollar. The Bureau of Labor Statistics is to release the official report at 14:00 GMT.
Monthly Budget Statement
The United States probably recorded a government budget deficit of USD 113 billion in July, according to market expectations, after a budget surplus of USD 6 billion during the previous month. The latter has been an 88% decrease compared to the figure reported in June 2015.
In June total receipts fell 3.8% to USD 330 billion. individual income taxes contributed the most (USD 134 billion), followed by social security and other payroll taxes (USD 111 billion), corporate income taxes (USD 61 billion), other taxes and duties (USD 23 billion).
Total outlays increased 10.6% to USD 323 billion during June. Interest on debt contributed to USD 27 billion, Medicare – USD 46 billion, defense – USD 49 billion, social security – USD 81 billion, other outlays – USD 121 billion, according to the report by the US Treasury.
The current fiscal year-to-date budget gap amounted to USD 401 billion, or a 26.9% increase compared to the same period a year earlier.
A larger-than-projected budget deficit in July would have a moderate bearish effect on the US dollar. The Financial Management Service is to publish the official figure at 18:00 GMT.
Bond Yield Spread
The yield on UK 2-year government bonds went as high as 0.137% on August 9th, after which it closed at 0.104% to lose 0.003 percentage point compared to August 8th.
Meanwhile, the yield on US 2-year government bonds climbed as high as 0.738% on August 9th, after which it fell to 0.706% at the close to lose 2 basis points (0.02 percentage point) compared to August 8th.
The spread between 2-year US and 2-year UK bond yields, which reflects the flow of funds in a short term, narrowed to 0.602% on August 9th from 0.619% on August 8th. The August 9th yield spread has been the lowest one since August 5th, when the difference was 0.573%.
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 – 1.3011
R2 – 1.3019
R3 (Range Resistance – Sell) – 1.3028
R4 (Long Breakout) – 1.3054
R5 (Breakout Target 1) – 1.3085
R6 (Breakout Target 2) – 1.3097
S1 – 1.2993
S2 – 1.2985
S3 (Range Support – Buy) – 1.2976
S4 (Short Breakout) – 1.2950
S5 (Breakout Target 1) – 1.2919
S6 (Breakout Target 2) – 1.2907
By using the traditional method of calculation, the weekly levels of importance for GBP/USD are presented as follows:
Central Pivot Point – 1.3155
R1 – 1.3289
R2 – 1.3507
R3 – 1.3641
R4 – 1.3774
S1 – 1.2937
S2 – 1.2803
S3 – 1.2585
S4 – 1.2366
In monthly terms, for GBP/USD we have the following pivots:
Central Pivot Point – 1.3171
R1 – 1.3546
R2 – 1.3858
R3 – 1.4233
R4 – 1.4608
S1 – 1.2859
S2 – 1.2484
S3 – 1.2172
S4 – 1.1860
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