Forex Market: GBP/USD daily trading outlook

Yesterday’s trade saw GBP/USD within the range of 1.4055-1.4184. The pair closed at 1.4135, edging up 0.13% on a daily basis. It has been the 27th gain in the past 59 trading days. The daily low has been the lowest level since March 16th, when a low of 1.4051 was registered. GBP/USD has increased its advance to 1.54% so far during the current month.

At 7:13 GMT today GBP/USD was inching down 0.02% for the day to trade at 1.4132. The pair touched a daily low at 1.4110 during mid-Asian trade, overshooting the daily S2 level, and a daily high at 1.4154 during the early phase of the Asian trading session.

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

Fundamentals

United States

Gross Domestic Product – final estimate

The final estimate of the US Gross Domestic Product probably pointed to an annualized rate of growth of 1.0% in the final quarter of 2015. If so, it would confirm the 2nd GDP estimate, reported on February 26th. The 2nd estimate outpaced the preliminary one, because business inventories were revised up, while the negative impact from trade was lower than anticipated, according to the Bureau of Economic Analysis.

According to the February 26th report, personal consumption expenditure (PCE) contributed 1.38 percentage points to US growth, as it increased 2% in Q4. The preliminary GDP report pointed to a 2.2% PCE growth. Fixed investment grew 0.1% in the final quarter, down from a 0.2% increase in the preliminary report. Non-residential investment contracted 1.9% during the period compared to a 1.8% slump in the preliminary estimate, while residential investment rose 8%, slowing down from an 8.1% growth in the preliminary release.

Private inventories subtracted 0.14 percentage points from US growth in Q4, as business entities accumulated inventories at the amount of USD 81.7 billion compared to USD 68.6 billion, as reported previously.

International trade subtracted 0.25 percentage points from growth in Q4 compared to -0.47 percentage points in the preliminary report. US exports contracted 2.7% in the final quarter of 2015 compared to a 2.5% decline in the preliminary release, while US imports fell 0.6% during the period compared to a 1.1% surge reported previously.

In case the final GDP exceeded market expectations, this would have a strong bullish effect on the US dollar. The official report is due out at 12:30 GMT.

Daily and Weekly Pivot Levels

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

R1 – 1.4147
R2 – 1.4159
R3 (range resistance) – 1.4170
R4 (range breakout) – 1.4206

S1 – 1.4123
S2 – 1.4111
S3 (range support) – 1.4100
S4 (range breakout) – 1.4064

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

Central Pivot Point – 1.4350
R1 – 1.4648
R2 – 1.4816
R3 – 1.5114

S1 – 1.4182
S2 – 1.3884
S3 – 1.3716