Forex Market: GBP/USD daily trading outlook

Yesterday’s trade saw GBP/USD within the range of 1.4224-1.4448. The pair closed at 1.4425, rising 1.26% on a daily basis. It has been the 8th gain in the past 21 trading days and also the sharpest one since December 3rd, when the pair added 1.30%. The daily high has been the highest level since January 13th, when a high of 1.4476 was registered.

At 7:31 GMT today GBP/USD was losing 0.25% for the day to trade at 1.4389. The pair touched a daily low at 1.4376 at 7:07 GMT, overshooting the daily S2 level, and a daily high at 1.4436 during the early phase of the Asian trading session.

On Tuesday GBP/USD trading may be influenced by the following macroeconomic report listed below.

Fundamentals

Construction PMI by Markit/CIPS

Activity in United Kingdom’s sector of construction probably increased at a slower pace in January from a month ago, with the corresponding Purchasing Managers Index coming in at 57.6, down from a reading of 57.8 in December. If so, January would be the 33rd consecutive month, when the gauge inhabited the area above 50.0. The index is based on a survey, encompassing managers of companies, operating in the construction sector. They are asked about their estimate regarding current business conditions (new orders, output, employment, demand in the future). Values above the key level of 50.0 signify predominant optimism in regard to business conditions. In case the PMI slowed down more than anticipated in January, this would have a limited-to-moderate bearish effect on the sterling. The Chartered Institute of Purchasing and Supply (CIPS) is to release the official index reading at 9:30 GMT.

Daily and Weekly Pivot Levels

By employing the Camarilla calculation method, the daily pivot levels for GBP/USD are presented as follows:

R1 – 1.4446
R2 – 1.4466
R3 (range resistance) – 1.4487
R4 (range breakout) – 1.4548

S1 – 1.4404
S2 – 1.4384
S3 (range support) – 1.4363
S4 (range breakout) – 1.4302

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

Central Pivot Point – 1.4270
R1 – 1.4393
R2 – 1.4539
R3 – 1.4662

S1 – 1.4124
S2 – 1.4001
S3 – 1.3855