Yesterday’s trade saw GBP/USD within the range of 1.4351-1.4547. The pair closed at 1.4434, falling 0.51% on a daily basis. It has been the 17th drop in the past 26 trading days and also a third consecutive one. The daily low has been the lowest level since February 2nd, when a low of 1.4324 was registered.
At 7:33 GMT today GBP/USD was edging down 0.11% for the day to trade at 1.4418. The pair touched a daily low at 1.4394 at 7:03 GMT, overshooting the daily S2 level, and a daily high at 1.4439 during the early phase of the Asian trading session.
On Tuesday GBP/USD trading may be influenced by the following macroeconomic reports as listed below.
Fundamentals
United Kingdom
Balance of Trade
The deficit on United Kingdom’s goods trade balance probably narrowed to GBP 10.350 billion in December, according to market expectations, from a deficit figure of GBP 10.640 billion during the preceding month. If expectations were met, this would be the lowest trade deficit since September 2015, when a gap of GBP 9.350 billion was reported.
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 sustainability of economic growth.
The gap on the nations total trade balance narrowed to GBP 3.170 billion in November from a revised down GBP 3.510 billion deficit posted in October. Lower prices of oil contributed to the larger drop in imports compared to that in exports.
In November, total exports went down 1.2% to reach GBP 42.2 billion. The drop in exports included a GBP 0.2 billion slump in export of services and a GBP 0.3 billion fall in shipments of goods, more precisely finished manufactures, according to the report by the Office for National Statistics (ONS). UK imports contracted 1.8% to reach GBP 45.38 billion during the same month. The entire decline reflected a drop in purchases of goods, more precisely fuels (a decrease by GBP 0.7 billion).
In case the UK trade deficit narrowed more than anticipated, this would have a moderate bullish effect on the sterling, because of positive implications regarding economic growth. The Office for National Statistics will publish the official trade data at 9:30 GMT.
United States
Job Openings
The number of job openings in the United States probably slowed down to 5.400 million in December from a month ago, according to the median forecast by experts. In November 5.431 million job openings were reported, or the highest level since September. This indicator refers to all job positions that are open, but not filled on the last business day of the month. Job openings are part of the Job Openings and Labor Turnover Survey (JOLTS), which gathers data from about 16 400 non-farm establishments including retailers and manufacturers, as well as federal, state, and local government entities in the 50 states and the District of Columbia. The survey assesses the unmet demand for labor in the labor market. A lower-than-projected level of job openings will usually have a limited bearish effect on the US dollar. The Bureau of Labor Statistics is to release the official report at 15:00 GMT.
Daily and Weekly Pivot Levels
By employing the Camarilla calculation method, the daily pivot levels for GBP/USD are presented as follows:
R1 – 1.4452
R2 – 1.4470
R3 (range resistance) – 1.4488
R4 (range breakout) – 1.4542
S1 – 1.4416
S2 – 1.4398
S3 (range support) – 1.4380
S4 (range breakout) – 1.4326
By using the traditional method of calculation, the weekly pivot levels for GBP/USD are presented as follows:
Central Pivot Point – 1.4466
R1 – 1.4707
R2 – 1.4912
R3 – 1.5153
S1 – 1.4261
S2 – 1.4020
S3 – 1.3815
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