Yesterday’s trade (in GMT terms) saw GBP/USD within the range of 1.2186-1.2250. The pair closed at 1.2239, rebounding 0.07% from Fridays close. It has been the 168th gain in the past 366 trading days. The major pair has trimmed its slump to 5.69% so far during the current month, after losing 1.23% in September.
At 7:17 GMT today GBP/USD was edging down 0.14% on the day to trade at 1.2222. The pair touched a daily high at 1.2240 during the early phase of the Asian trading session, undershooting the daily R1 level, and a daily low at 1.2210 during early Asian trade as well.
On Tuesday GBP/USD trading may be influenced by the following macroeconomic reports and other events as listed below.
Fundamentals
United Kingdom
BoE Carney statement
At 14:35 GMT Bank of England Governor, Mark Carney, is expected to speak in front of the House of Lords Economic Affairs Committee in London. Any remarks in regard to the Bank’s policy stance or Brexit implications may heighten GBP volatility.
United States
S&P Case-Shiller Home Price Index
At 13:00 GMT Standard & Poor’s/Case-Schiller will report on the performance of their House Price Index, which measures the change in values of single-family homes in 20 metropolitan areas across the United States. The report serves as a gauge of the US housing market’s health. According to the median estimate by experts, home prices in the 20 areas probably rose 5.0% in August compared to August 2015, while matching the rate in July. It has been the lowest annual increase since August 2015. In July, home values in Portland recorded the highest annual increase (up 12.4%), followed by Seattle (up 11.2%) and Denver (up 9.4%). Within a recovering economy, a higher-than-projected gain in prices will usually have a limited-to-moderate bullish effect on the local currency.
Consumer Confidence Index by the CB
Confidence among consumers in the United States probably eased in October, with the corresponding index coming in at a reading of 101.0, according to market expectations. In September the gauge was reported at 104.1, while confounding the median estimate pointing to a slowdown to 99.0. It has been the highest level of confidence since August 2007, when the gauge came in at 105.6.
This indicator measures the level of individuals’ confidence in the US economic development. It is considered as a leading indicator, as it gives an early insight into consumer spending, which accounts for a major part of the nation’s GDP.
In case the index slowed down more than anticipated, this would have a strong bearish effect on the US dollar, as lower confidence, in general, suggests a lesser willingness to spend and, respectively, a slower economic growth. The Conference Board research group is to release the official report at 14:00 GMT.
Bond Yield Spread
The yield on UK 2-year government bonds went up as high as 0.260% on October 24th, after which it closed at 0.234% to lose 1.4 basis points (0.014 percentage point) compared to October 21st.
Meanwhile, the yield on US 2-year government bonds climbed as high as 0.848% on October 24th, or the highest level since October 14th (0.863%), after which it fell to 0.840% at the close to add 1.2 basis points (0.012 percentage point) compared to October 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 0.606% on October 24th from 0.580% on October 21st. The October 24th yield spread has been the largest one since October 20th, when the difference was 0.610%.
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 – 1.2245
R2 – 1.2251
R3 (Range Resistance – Sell) – 1.2257
R4 (Long Breakout) – 1.2274
R5 (Breakout Target 1) – 1.2295
R6 (Breakout Target 2) – 1.2304
S1 – 1.2233
S2 – 1.2227
S3 (Range Support – Buy) – 1.2221
S4 (Short Breakout) – 1.2204
S5 (Breakout Target 1) – 1.2183
S6 (Breakout Target 2) – 1.2175
By using the traditional method of calculation, the weekly levels of importance for GBP/USD are presented as follows:
Central Pivot Point – 1.2233
R1 – 1.2331
R2 – 1.2430
R3 – 1.2528
R4 – 1.2625
S1 – 1.2134
S2 – 1.2036
S3 – 1.1937
S4 – 1.1837
In monthly terms, for GBP/USD we have the following pivots:
Central Pivot Point – 1.3113
R1 – 1.3312
R2 – 1.3645
R3 – 1.3844
R4 – 1.4042
S1 – 1.2780
S2 – 1.2581
S3 – 1.2248
S4 – 1.1914
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