Friday’s trade saw GBP/USD within the range of 1.4504-1.4647. The pair closed at 1.4520, falling 0.67% on a daily basis. It has been the eighth drop in the past nine trading days and also a sixth consecutive one. The daily low has been the lowest level since June 9th 2010, when a low of 1.4404 was registered. In weekly terms, GBP/USD lost 1.55% of its value last week, while extending the loss registered in the week ended on January 3rd. GBP/USD has depreciated 1.30% so far in the current month, following two consecutive months of decline.
At 8:45 GMT today GBP/USD was gaining 0.14% for the day to trade at 1.4544. The pair touched a daily high at 1.4562 at 8:23 GMT and a daily low at 1.4495 during the early hours of Asian trading session. The latter was a test of the daily S2 level and also the lowest level since June 9th 2010. Resistance may be encountered at the hourly 55-period EMA (1.4575) and then – at the hourly 100-period EMA (1.4613). Support may be received at the current daily low (1.4495).
No relevant macroeconomic reports and other events, which may influence GBP/USD trading, are scheduled on Monday.
Correlation with other Majors
Taking into account the week ended on January 10th and the daily closing levels of the major currency pairs, we come to the following conclusions in regard to the strength of relationship:
GBP/USD to NZD/USD (0.9901, or very strong)
GBP/USD to AUD/USD (0.9527, or very strong)
GBP/USD to USD/JPY (0.9171, or very strong)
GBP/USD to USD/CHF (0.5594, or strong)
GBP/USD to EUR/USD (-0.6211, or strong)
GBP/USD to USD/CAD (-0.9607, or very strong)
1. During the examined period GBP/USD moved almost equally in one and the same direction with USD/JPY, AUD/USD and NZD/USD. The correlation between EUR/USD and NZD/USD was almost perfect.
2. GBP/USD moved almost equally in the opposite direction compared to USD/CAD during the past week.
3. GBP/USD moved strongly in one and the same direction with USD/CHF during the period in question, while moving strongly in the opposite direction compared to EUR/USD.
Daily and Weekly Pivot Levels
By employing the Camarilla calculation method, the daily pivot levels for GBP/USD are presented as follows:
R1 – 1.4533
R2 – 1.4546
R3 (range resistance) – 1.4559
R4 (range breakout) – 1.4599
S1 – 1.4507
S2 – 1.4494
S3 (range support) – 1.4481
S4 (range breakout) – 1.4441
By using the traditional method of calculation, the weekly pivot levels for GBP/USD are presented as follows:
Central Pivot Point – 1.4613
R1 – 1.4722
R2 – 1.4924
R3 – 1.5033
S1 – 1.4411
S2 – 1.4302
S3 – 1.4100
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