Yesterdays trade saw GBP/USD within the range of 1.3836-1.3946. The pair closed at 1.3927, rising 0.48% on a daily basis. It has been the 15th gain in the past 41 trading days and also the steepest one since February 19th. The daily low has been the lowest level since March 12th 2009, when a low of 1.3703 was registered. GBP/USD depreciated 2.25% in February to mark its fourth consecutive month of decline.
At 7:37 GMT today GBP/USD was inching up 0.09% for the day to trade at 1.3939. The pair touched a daily high at 1.3949 at 6:20 GMT, overshooting the daily R2 level, and a daily low at 1.3914 during early Asian trade.
On Tuesday GBP/USD trading may be influenced by the following macroeconomic reports as listed below.
Fundamentals
United Kingdom
Manufacturing PMI by Markit/CIPS
Activity in United Kingdom’s sector of manufacturing probably increased at a slower pace in February compared to a month ago, with the corresponding Purchasing Managers Index coming in at a reading of 52.2, according to the median forecast by experts, down from 52.9 in January. If expectations were met, February would be the 34th consecutive month, when the PMI stood above the key level of 50.0.
The index is based on a survey, encompassing managers of companies, that operate in sectors such as manufacturing, mining, utilities. They are asked about their estimate in regard to current business conditions in the sector in terms of new orders, output, employment, demand in the future. Values above 50.0 signify that respondents are rather optimists about business conditions in the sector than pessimists.
In case the PMI slowed down more than projected in February, this would have a strong bearish effect on the sterling. The Chartered Institute of Purchasing and Supply (CIPS) is expected to release the official PMI reading at 9:30 GMT.
United States
Manufacturing PMI by Markit – final reading
The final estimate of the Manufacturing Purchasing Managers Index for February probably confirmed the flash estimate of 51.0, which was reported on February 22nd. If so, it would be the lowest index level since October 2012, when a final reading of 51.0 was reported. In January the final seasonally adjusted PMI stood at 52.4, inching down from a preliminary value of 52.7.
According to the preliminary report by Markit, ”Manufacturers overwhelmingly linked the slowdown to softer underlying demand patterns in February, while only a small minority cited temporary weather related disruptions. There were reports that weaker business sentiment, alongside uncertainty about the general economic outlook, had encouraged clients to delay spending decisions during the latest survey period.”
”Softer demand patterns contributed to a renewed decline in pressures on operating capacity across the manufacturing sector during February. This was highlighted by the sharpest reduction in backlogs of work since September 2009.”
”Input buying fell in February, thereby ending a 27-month period of expansion, while manufacturers’ finished goods inventories built up for the third month running. Employment growth was maintained in February, although the rate of job creation was one of the weakest seen over the past three years”, Markit stated.
Values above the key level of 50.0 indicate optimism (expanding activity). In case the final PMI for January confirmed or came above the preliminary reading, this would cause a moderate bullish impact on the US dollar. The final reading is due out at 14:45 GMT.
Manufacturing PMI by the ISM
Activity in United States’ manufacturing sector probably improved in February, with the corresponding manufacturing PMI coming in at a reading of 48.8, according to expectations, up from 48.2 in December and January. The latter has been the lowest PMI reading since June 2009, when the gauge was reported at 44.8.
The New Orders Index came in at 51.5 in January, up from 48.8 in December. The sub-gauge of production was reported at 50.2, advancing from 49.9 in December. The index of employment slid to a value of 45.9 in January from 48.0 in the preceding month. The gauge of prices was at 33.5 in January, matching the reading in December, which suggested lower prices of raw materials for a 15th month in a row. In January, 8 manufacturing industries reported growth and 10 reported contraction in overall business activity, according to the report by the Institute for Supply Management (ISM).
In case the manufacturing benchmark improved more than anticipated in February, this would have a strong bullish effect on the US dollar. The Institute for Supply Management (ISM) is to release the official reading 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 – 1.3937
R2 – 1.3947
R3 (range resistance) – 1.3958
R4 (range breakout) – 1.3988
S1 – 1.3917
S2 – 1.3906
S3 (range support) – 1.3896
S4 (range breakout) – 1.3867
By using the traditional method of calculation, the weekly pivot levels for GBP/USD are presented as follows:
Central Pivot Point – 1.4014
R1 – 1.4177
R2 – 1.4483
R3 – 1.4646
S1 – 1.3708
S2 – 1.3545
S3 – 1.3239
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
