Forex Market: GBP/USD daily trading forecast

Yesterday’s trade saw GBP/USD within the range of 1.6097-1.6233. The pair closed at 1.6105, losing 0.67% on a daily basis.

At 6:43 GMT today GBP/USD was down 0.07% for the day to trade at 1.6093. The pair broke the first key weekly support level and touched a daily low at 1.6064 at 3:15 GMT.

Fundamental view

United Kingdom

Balance of Trade

The deficit on United Kingdom’s goods trade balance probably narrowed to 9.100 billion GBP in July from a deficit figure of 9.413 billion GBP during the preceding month. Exports of goods fell 1.6% between May and June to reach 23.5 billion GBP, as exports of fuels dropped by 0.2 billion GBP, while exports of semi manufactured goods and those of finished manufactures also fell by 0.2 billion GBP. Imports of goods regarding the same period dropped 0.4% to 32.9 billion GBP, as fuel imports decreased by 0.4 billion GBP.

This indicator is also known as 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 UK economy is to a great extent dependent on trade, the visible trade balance is considered as a key factor, providing clues over the resilience of nation’s economic growth. In case UK trade decifit shrank more than anticipated, this would provide support to the pound. The Office for National Statistics (ONS) will publish the official figure at 8:30 GMT.

In June countrys total trade balance produced a deficit of 2.459 billion GBP in June, which has been the largest gap since January.

Manufacturing and Industrial Output

Annualized industrial output in the United Kingdom probably expanded 1.3% in July, following a 1.2% gain during the preceding month, which has been the slowest pace of increase since December 2013. In monthly terms, industrial production probably increased 0.2% in July. The index presents the change in the total inflation-adjusted value of production in sectors such as manufacturing, mining and energetics.

United Kingdom’s annualized manufacturing production, a short-term indicator which accounts for almost 80% of nation’s industrial output, probably expanded 2.2% in July. In June manufacturing output rose at an annualized pace of 1.9%, the least since December last year. In monthly terms, production probably increased 0.3% during July. As it is a key component of 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 8:30 GMT.

Technical view

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.6145. In case GBP/USD manages to breach the first resistance level at 1.6193, it will probably continue up to test 1.6281. In case the second key resistance is broken, the pair will probably attempt to advance to 1.6329.

If GBP/USD manages to breach the first key support at 1.6057, it will probably continue to slide and test 1.6009. With this second key support broken, the movement to the downside will probably continue to 1.5921.

The mid-Pivot levels for today are as follows: M1 – 1.5965, M2 – 1.6033, M3 – 1.6101, M4 – 1.6169, M5 – 1.6237, M6 – 1.6305.

In weekly terms, the central pivot point is at 1.6418. The three key resistance levels are as follows: R1 – 1.6553, R2 – 1.6780, R3 – 1.6915. The three key support levels are: S1 – 1.6191, S2 – 1.6056, S3 – 1.5829.