Yesterday’s trade saw GBP/USD within the range of 1.4005-1.4156. The pair closed at 1.4005, falling 1.02% on a daily basis. It has been the 23rd drop in the past 37 trading days and also the second consecutive one. The daily low has been the lowest level since March 18th 2009, when a low of 1.3847 was registered.
At 7:24 GMT today GBP/USD was inching up 0.05% for the day to trade at 1.4012. The pair touched a daily low at 1.3965 in mid-Asian trade, undershooting the range support level (S3), and a daily high at 1.4028 during the early phase of the Asian trading session.
On Wednesday GBP/USD trading may be influenced by the following macroeconomic reports as listed below.
Fundamentals
United Kingdom
BBA Home Loans
The number of home loans in the United Kingdom, issued by the British Bankers’ Association (BBA), probably increased to 45 200 in January, according to market expectations, from 43 975 in December. If expectations were met, this would be the highest number of loans since October 2015, when 45 437 loans were issued. The BBA features the major banks in the country, which account for almost 60% of overall mortgage lending. The number of mortgage loans is considered as a leading indicator in regard to UK housing market conditions. As growth in mortgage lending signifies a healthy housing sector, which also contributes to overall economic activity, in case the number of loans rose more than projected, this would boost demand for the sterling. The BBA is to publish the official figure at 9:30 GMT.
United States
Services PMI by Markit – preliminary reading
Activity in the US sector of services probably increased at a faster rate in February from a month ago, with the corresponding preliminary Purchasing Managers Index coming in at a reading of 53.5, according to expectations. In January the services PMI was reported at a final 53.2, falling from a preliminary reading of 53.7. It has been the lowest reading since October 2013, dragged down by lower output and new business orders. The PMI is based on data collected from a representative panel of more than 400 private sector companies, which encompasses industries such as transport and communication, financial intermediaries, business and personal services, computing & IT and hotels & restaurants. Values above the key level of 50.0 indicate optimism (expansion in general activity). In case a faster-than-expected expansion in services sector activity is reported, this would have a moderate bullish effect on the US dollar, as services contribute to a considerable portion of the US GDP. The preliminary reading by Markit Economics is due out at 14:45 GMT.
New Home Sales
Sales of new single-family homes probably decreased 4.4% to the seasonally adjusted annual rate of 520 000 in January, according to market expectations, from 544 000 reported in December. The latter has been the highest sales level since February 2015, when a figure of 545 000 was reported. Sales in the Midwest climbed 31.6% in December, while those in the Northeast were up 20.8%. Additionally, sales in the West surged 21%, while those in the South were 0.4% higher.
The median sales price of new houses sold went up as high as USD 288 900 in December, after being at USD 297 000 in the preceding month. The average sales price went down to USD 346 400 in December from USD 364 200 in November. At the end of the month, the seasonally adjusted estimate of new houses for sale was 237 000, up from 231 000 at the end of November. It represents a supply of 5.2 months at the current sales rate, according to the report by the US Census Bureau.
In case the index showed a worse-than-anticipated performance, this would have a strong bearish effect on the US dollar. The Census Bureau is to report the official figure 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 – 1.4019
R2 – 1.4033
R3 (range resistance) – 1.4047
R4 (range breakout) – 1.4088
S1 – 1.3991
S2 – 1.3977
S3 (range support) – 1.3963
S4 (range breakout) – 1.3922
By using the traditional method of calculation, the weekly pivot levels for GBP/USD are presented as follows:
Central Pivot Point – 1.4392
R1 – 1.4552
R2 – 1.4697
R3 – 1.4857
S1 – 1.4247
S2 – 1.4087
S3 – 1.3942
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