Forex Market: GBP/USD daily trading outlook

Yesterdays trade saw GBP/USD within the range of 1.5614-1.5391, the highest since December 30th. The pair closed at 1.5587, surging 0.97% for the day after it settled last week 2.1% higher.

At 06:43 GMT today GBP/USD was down 0.05% for the day to trade at 1.5579. The cross held in a daily range between 1.5564 and 1.5590.

Fundamental view

United Kingdom

Annualized industrial production in the United Kingdom probably expanded 0.2% in March, following a 0.1% gain during the preceding month. If so, this would be the 19th straight monthly expansion. In monthly terms, industrial production probably increased 0.1% in March, according to expectations, after a 0.1% in February which ended four consecutive contractions. The index measures the change in the total inflation-adjusted value of production in sectors such as manufacturing, mining and utilities.

United Kingdom’s annualized manufacturing production, a short-term indicator which accounts for almost 80% of the nation’s industrial output, probably grew 1.0% in March. If so, this would be the 19th consecutive month of output growth as well. In February, the gauge showed a reading of 1.1%. In monthly terms, production probably jumped 0.3%, according to expectations, following a 0.4% growth in February. As it is a key component of the country’s Gross Domestic Product, in case manufacturing production expanded more than projected, this would have a bullish effect on the sterling. The Office for National Statistics (ONS) will release the official industrial data at 08:30 GMT.

United States

Redbook Research Inc. releases its Johnson Redbook Index for the week ended May 9th today. This metric measures the growth in US retail sales and is based on sales data provided by around 9 000 large general merchandise retailers representing over 80% of the equivalent “official” retail sales series published by the Commerce Department. The year-over-year value of the metric was at 1.6% for the seven days through May 2nd, while the month-on-month reading came in at 0.4%. The data is due out today at 12:55 GMT.

Meanwhile, the number of job openings in the United States probably fell to 5.085 million in March from 5.133 million in the prior month, which was the highest reading since January 2001 when 5.273 million were reported. This indicator refers to all 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. Higher-than-projected number of openings is usually dollar positive. The Bureau of Labor Statistics is to release the official data at 14:00 GMT.

Pivot points

According to Binary Tribune’s daily analysis, the pair’s central pivot point stands at 1.5531. In case it penetrates the first resistance level at 1.5670, it will encounter next resistance at 1.5754. If breached, upside movement may attempt to advance to 1.5893.

If the cross drops below its S1 level at 1.5447, it will next see support at 1.5308. If the second key support zone is breached, downward movement may extend to 1.5224.

In weekly terms, the central pivot point is at 1.5356. The three key resistance levels are as follows: R1 – 1.5625, R2 – 1.5794, R3 – 1.6063. The three key support levels are: S1 – 1.5187, S2 – 1.4918, S3 – 1.4749.