Forex Market: GBP/BGN trading outlook for January 25th

Friday’s trade saw GBP/BGN within the range of 2.5552-2.5995. The pair closed at 2.5846, surging 1.06% on a daily basis, or at the sharpest rate since October 22nd, when it advanced 1.90%. It has been the fourth gain in the past five trading days and also a third consecutive one. In addition, the daily high has been the highest level since January 15th, when a high of 2.5998 was reached. In weekly terms, GBP/BGN added 1.16% to its value during the current week, while marking its first gain in the past nine weeks. The pair has fallen 2.66% so far during the current month, following a 4.76% drop in December. The latter has been the steepest monthly decline since January 2013.

On Monday (January 25th) GBP/BGN trading may be influenced by the following macroeconomic report listed below.

Fundamentals

United Kingdom

CBI Industrial Trend Orders

At 11:00 GMT the Confederation of British Industry (CBI) will announce the results from its January survey, encompassing 17 major industries. The gauge of industrial orders in the UK stood in negative territory for an 8th consecutive period in the three months to December, as it came in at a reading of -7, improving from -11 in the three-months to November.

This indicator reflects the net balance between companies, that registered an increase in industrial orders during the respective period of three months and those, that registered a drop. It is the oldest indicator, released from the UK private sector, to show the development tendency in the countrys industry. The Industrial Trends Survey by the Confederation of British Industry provides expert qualitative opinion from senior manufacturing executives, on past and expected trends in output, exports, prices, costs, investment intentions, business confidence and capacity utilization. A level above zero suggests that volume of orders is projected to increase, while a level below zero indicates that expectations point to lower volumes. If the survey showed predominant pessimism for a 9th consecutive period, this would have a limited bearish effect on the sterling.

Correlation with other currency pairs

Taking into account the week ended on January 22nd 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 DKK/BGN (0.9582, or very strong)
GBP/BGN to USD/CHF (0.9578, or very strong)
GBP/BGN to USD/BGN (0.9566, or very strong)
GBP/BGN to GBP/USD (0.9197, or very strong)
GBP/BGN to USD/JPY (0.7754, or strong)
GBP/BGN to NZD/USD (0.6514, or strong)
GBP/BGN to AUD/USD (0.6183, or strong)
GBP/BGN to USD/CAD (-0.8495, or very strong)
GBP/BGN to CHF/BGN (-0.8739, or very strong)
GBP/BGN to EUR/USD (-0.9548, or very strong)

1. During the examined period GBP/BGN moved almost equally in one and the same direction with GBP/USD, USD/BGN, USD/CHF and DKK/BGN. This relationship has been the most pronounced between GBP/BGN and DKK/BGN.

2. GBP/BGN moved almost equally in the opposite direction compared to USD/CAD, CHF/BGN and EUR/USD during the week.

3. GBP/BGN moved strongly in one and the same direction with AUD/USD, NZD/USD and USD/JPY during the period in question.

Daily and Weekly Pivot Levels

By employing the traditional calculation method, the Monday pivot levels for GBP/BGN are presented as follows:

Central Pivot Point – 2.5798
R1 – 2.6043
R2 – 2.6241
R3 – 2.6486

S1 – 2.5600
S2 – 2.5355
S3 – 2.5157

By using the traditional method of calculation again, the weekly pivot levels for GBP/BGN are presented as follows:

Central Pivot Point – 2.5682
R1 – 2.6159
R2 – 2.6473
R3 – 2.6950

S1 – 2.5368
S2 – 2.4891
S3 – 2.4577