Yesterday’s trade (in GMT terms) saw GBP/USD within the range of 1.3161-1.3275. The pair closed at 1.3232, edging up 0.26% compared to Tuesdays close. It has been the 148th gain in the past 323 trading days and also a third consecutive one. The daily high has been the highest level since August 4th, when a high of 1.3347 was registered. The major pair has trimmed its loss to a mere 0.02% so far during the current month, after losing 0.59% of its value in July.
At 7:16 GMT today GBP/USD was edging down 0.12% on the day to trade at 1.3216. The pair touched a daily high at 1.3266 during the early phase of the Asian trading session, overshooting the range resistance level (R3), and a daily low at 1.3202 during late Asian trade.
On Thursday GBP/USD trading may be influenced by the following macroeconomic reports as listed below.
Fundamentals
United States
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 August 19th, probably rose to 265 000, according to market consensus, from 262 000 in the preceding week. The latter has been the lowest number of claims since the business week ended on July 15th, when the revised down 252 000 claims were reported.
The 4-week moving average, an indicator lacking seasonal effects, was 265 250, marking an increase by 2 500 compared to the preceding week’s unrevised average.
The business week, which ended on August 12th, has been the 76th consecutive week, when jobless claims stood below the 300 000 threshold, which suggested a healthy labor market. It has been the longest streak since 1970.
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 fell to the seasonally adjusted 2 153 000 during the business week ended on August 12th, according to the median forecast by experts, from 2 175 000 in the preceding week. The latter represented an increase by 15 000 compared to the revised up number of claims reported in the week ended on July 29th. 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.
Durable Goods Orders
The value of durable goods orders in the United States probably rebounded after two consecutive months of decline, going up 3.3% in July from a month ago, according to the median forecast by experts. In June orders fell at a revised down monthly rate of 3.9% (-4.0% previously).
The value of shipments of manufactured durable goods, up in two out of the past three months, rose 0.4% (or USD 0.9 billion) in June to reach USD 232.5 billion. The value of unfilled orders for manufactured durable goods, down after three straight months of expansion, fell 0.9% (or USD 9.7 billion) in June to reach USD 1,127.9 billion. At the same time, the value of inventories of manufactured durable goods, down in 11 out of the past 12 months, shrank 0.2% (or USD 0.7 billion) during the period to USD 381.5 billion, according to data by the US Census Bureau.
Non-defense new orders for capital goods dropped 11.3% (or USD 8.2 billion) in June to USD 64.8 billion, while defense new orders for capital goods slumped 20.7% (or USD 1.9 billion) during the month to USD 7.3 billion.
The value of durable goods orders, excluding transportation, probably rose 0.5% in July from a month ago, according to expectations, following a revised down 0.4% drop in June. If expectations were met, this would be the fastest monthly increase since April, when core orders went up at a revised up 0.5%.
In case the general index went up at a faster-than-projected pace, this would have a strong bullish effect on the US dollar, due to positive implications in regard to the wider gauge of production, factory orders. The US Census Bureau is scheduled to release the official report at 12:30 GMT.
Services PMI by Markit – preliminary reading
Activity in the US sector of services probably increased at a faster rate in August from a month ago, with the corresponding preliminary Purchasing Managers’ Index coming in at a reading of 52.0, according to the median forecast by experts, from a final 51.4 in July. If expectations were met, this would be the highest PMI level since April, when the gauge came in at 52.8. According to Markit, in July the gauge of new orders rose at a slower pace, employment in services picked up slightly, while business sentiment improved notably compared to the all-time low in June.
The PMI is based on data collected from a representative panel of more than 400 private sector companies, which encompasses industries such as transport and communication, financial intermediaries, business and personal services, computing & IT and hotels & restaurants. Values above the key level of 50.0 indicate predominant optimism (expansion in general activity). In case a faster than-expected expansion in services sector activity is reported, this would have a moderate bullish effect on the US dollar, as services contribute to a considerable portion of the US GDP. The preliminary reading by Markit Economics is due out at 13:45 GMT.
Bond Yield Spread
The yield on UK 2-year government bonds went as high as 0.164% on August 24th, or the highest level since August 19th (0.168%), after which it closed at 0.152% to add 2.5 basis points (0.025 percentage point) compared to August 23rd.
Meanwhile, the yield on US 2-year government bonds climbed as high as 0.770% on August 24th, after which it fell to 0.769% at the close to add 2.3 basis points (0.023 percentage point) compared to August 23rd.
The spread between 2-year US and 2-year UK bond yields, which reflects the flow of funds in a short term, narrowed to 0.617% on August 24th from 0.619% on August 23rd. The August 24th yield spread has been the lowest one since August 19th, when the difference was 0.591%.
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 – 1.3242
R2 – 1.3253
R3 (Range Resistance – Sell) – 1.3263
R4 (Long Breakout) – 1.3295
R5 (Breakout Target 1) – 1.3331
R6 (Breakout Target 2) – 1.3347
S1 – 1.3222
S2 – 1.3211
S3 (Range Support – Buy) – 1.3201
S4 (Short Breakout) – 1.3169
S5 (Breakout Target 1) – 1.3133
S6 (Breakout Target 2) – 1.3117
By using the traditional method of calculation, the weekly levels of importance for GBP/USD are presented as follows:
Central Pivot Point – 1.3043
R1 – 1.3220
R2 – 1.3363
R3 – 1.3540
R4 – 1.3717
S1 – 1.2900
S2 – 1.2723
S3 – 1.2580
S4 – 1.2437
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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