Forex Market: GBP/USD daily trading outlook

Yesterday’s trade saw GBP/USD within the range of 1.5365 – 1.5219. The pair closed 0.57% higher at 1.5350.

At 07:24 GMT today GBP/USD was down 0.30% for the day to trade at 1.5303. The cross held in a daily range between 1.5297 and 1.5375 and is up 0.2% for the week, having fallen by a combined 2.9% over the past three weeks.

Fundamentals

United Kingdom

The Office for National Statistics will likely report today that the visible UK trade deficit narrowed to 9.90 billion pounds in April from 10.12 billion a month earlier. The deficit was at -10.34 billion pounds in February, the largest since September 2014 when a gap of -10.51 billion was reported.

This indicator is known as the visible trade balance because it reflects the difference in value between exported and imported physical goods, without the inclusion of exported and imported services. Since the UK economy is to a great extent dependent on trade, the visible trade balance is considered as a key factor, providing clues over the sustainability of economic growth.

The gap on the nation’s total trade balance probably shrank to 2.3 billion pounds in April from a 2.817 billion posted in March. Marchs reading reflected a narrowing from a revised 3.3-billion-pounds deficit in February as exports to countries outside the European Union grew, while imports of aircraft and ships declined.

The non-EU trade balance is projected to come in at a deficit of 3.00 billion pounds in April from -3.16 billion in March.

A larger-than-projected narrowing in the UKs trade deficit will provide bullish support for the British pound, and vice versa. The data are due out at 08:30 GMT.

United States

Redbook Research Inc. will release its Johnson Redbook Index for the seven days through June 6th. 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 1.7% for the seven days through May 30th, while the month-on-month reading came in at -0.3%. The data are due out at 12:55 GMT.

Meanwhile, the number of job openings in the United States probably rose to 5.030 million in April from 4.994 million. The gauge stood at 5.144 million in February 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 1.5311. In case it penetrates the first resistance level at 1.5404, it will encounter next resistance at 1.5457. If breached, upside movement may attempt to advance to 1.5550.

If the cross drops below its S1 level at 1.5258, it will next see support at 1.5165. If the second key support zone is breached, downward movement may extend to 1.5112.

In weekly terms, the central pivot point is at 1.5294. The three key resistance levels are as follows: R1 – 1.5420, R2 – 1.5568, R3 – 1.5694. The three key support levels are: S1 – 1.5146, S2 – 1.5020, S3 – 1.4872.