Forex Market: GBP/USD trading forecast for Monday

During Friday’s trading session GBP/USD traded within the range of 1.7004-1.7061 and closed at 1.7015, losing 0.15% for the day, but gaining 0.28% for the week.

Fundamental view

At 14:00 GMT the National Association of Realtors (NAR) will report on existing home sales in the United States during May. The existing home sales probably jumped 2.2% to an annualized pace of 4.74 million units in May from a month ago. In April compared to March, existing home sales rose 1.3% to an annualized level of 4.65 million. The sample of data encompasses condos, co-ops and single-family houses.

Statistical data on existing home sales is often used along with statistical figures regarding the New home sales and Pending home sales, with the major objective being to draw a conclusion how nation’s housing sector is performing, regardless of interest rates. The most active house-purchasing period in the United States is usually between the months of March through June. Therefore, in case statistical data revealed a sudden drop in the number of homes sold rather than an improvement during this period, this would be considered as a signal of weakness in country’s housing market.

The report on existing home sales usually does not cause a real direct impact on US economy. Actually, this effect appears to be minimal, due to the fact that nothing is produced with the mere sale of an existing home. In terms of economic activity, the sale of an existing house may be related only to interior design and purchases of new furniture.

In case the index increased more than anticipated, this would support the greenback.

Technical view

According to Binary Tribune’s daily analysis, in case GBP/USD manages to breach the first resistance level at 1.7049, it will probably continue up to test 1.7084. In case the second key resistance is broken, the pair will probably attempt to advance to 1.7106.

If GBP/USD manages to breach the first key support at 1.6992, it will probably continue to slide and test 1.6970. With this second key support broken, the movement to the downside will probably continue to 1.6935.