Forex Market: GBP/BGN trading outlook for August 1st

Written by Miroslav Marinov

Miroslav Marinov, a financial news editor at TradingPedia, is engaged with observing and reporting on the tendencies in the Foreign Exchange Market, as currently his focus is set on the major currencies of eight developed nations worldwide.

, | Updated: October 30, 2024

Friday’s trade saw GBP/BGN within the range of 2.3248-2.3337. The pair closed at 2.3337, surging 0.70% compared to Thursdays close. It has been the 20th gain in the past 31 trading days and also the steepest one since July 18th, when the pair rose 0.92%. In weekly terms, GBP/BGN added 0.27% to its value during the current week. It has been the 11th gain in the past 30 weeks. The exotic cross depreciated 1.19% in July, following a 7.84% slump in June.

On Monday (August 1st) GBP/BGN trading may be influenced by the following macroeconomic report as listed below.

Fundamentals

United Kingdom

Manufacturing PMI by Markit/CIPS

Activity in United Kingdom’s sector of manufacturing probably shrank for the first time in three months in July, with the corresponding Purchasing Managers Index coming in at a final reading of 49.1, according to the median forecast by experts, or matching the preliminary estimate, reported on July 22nd. It has been the lowest reading since March 2013, as the sub-gauges of output and new orders both decreased for the first time since early 2013. In June the PMI was reported at 52.1.

The index is based on a survey, encompassing managers of companies, that operate in sectors such as manufacturing, mining, utilities. They are asked about their estimate in regard to current business conditions in the sector in terms of new orders, output, employment, demand in the future. Values below 50.0 signify that respondents are rather pessimists about business conditions in the sector than optimists.

In case the PMI dropped more than projected in July, this would have a strong bearish effect on the Sterling. The Chartered Institute of Purchasing and Supply (CIPS) is expected to release the official PMI reading at 8:30 GMT.

Correlation with other currency pairs

Taking into account the business week ended on July 29th and the daily closing levels of the currency pairs involved, we come to the following conclusions in regard to the strength of relationship:

GBP/BGN to GBP/USD (0.2712, or weak)
GBP/BGN to AUD/USD (0.1005, or weak)
GBP/BGN to USD/CHF (0.0997, or very weak)
GBP/BGN to USD/BGN (0.0939, or very weak)
GBP/BGN to NZD/USD (0.0589, or very weak)
GBP/BGN to USD/CAD (-0.0041, or very weak)
GBP/BGN to CHF/BGN (-0.0884, or very weak)
GBP/BGN to EUR/USD (-0.0981, or very weak)
GBP/BGN to USD/JPY (-0.2134, or weak)

1. During the examined period GBP/BGN moved almost independently compared to USD/CHF, USD/BGN, NZD/USD, USD/CAD, CHF/BGN and EUR/USD. The correlation between GBP/BGN and USD/CAD was almost non-existent.

2. The correlation between GBP/BGN and GBP/USD, GBP/BGN and AUD/USD, GBP/BGN and USD/JPY was insignificant.