Friday’s trade saw GBP/USD within the range of 1.4171-1.4372. The pair closed at 1.4224, plummeting 0.98% on a daily basis. It has been the 36th drop in the past 65 trading days, a third consecutive one and also the steepest one since March 22nd, when the pair fell 1.11%. The daily low has been the lowest level since March 28th, when a low of 1.4116 was registered. In weekly terms, GBP/USD added 0.57% to its value during the past week. It has been the 7th gain in the past 13 weeks. The major advanced 3.23% in March, following four consecutive months of decline. Marchs rate of increase has been the fastest since April 2015.
At 6:39 GMT today GBP/USD was edging down 0.11% for the day to trade at 1.4209. The pair touched a daily low at 1.4205 at 6:17 GMT, overshooting the daily S1 level, and a daily high at 1.4243 during the early phase of the Asian trading session.
On Monday GBP/USD trading may be influenced by the following macroeconomic reports as listed below.
Fundamentals
United Kingdom
Construction PMI by Markit/CIPS
Activity in United Kingdom’s sector of construction probably increased at a slower pace in March from a month ago, with the corresponding Purchasing Managers’ Index coming in at 54.0, down from a reading of 54.2 in February. If so, March would be the 35th 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. However, in case the PMI slowed down more than anticipated in March, 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 8:30 GMT.
United States
Factory Orders
Factory orders in the United States probably shrank 1.6% in February compared to January, according to the median estimate by experts, following a 1.6% expansion in the preceding month. Januarys increase has been the fastest since June 2015, when a revised up 2.2% gain was reported. Excluding the sector of transportation, factory orders went down 0.2% in January from a month ago. This indicator reflects the total value of new purchase orders, placed at manufacturers for durable and non-durable goods, and can provide insight into inflation and growth in the US sector of manufacturing. In case the general index of new orders dropped at a faster-than-anticipated rate, this would have a moderate bearish effect on the US dollar, as it implies future growth slowdown. The US Census Bureau will release the official data at 14:00 GMT.
Correlation with other Majors
Taking into account the week ended on April 1st and the daily closing levels of the major currency pairs, we come to the following conclusions in regard to the strength of relationship:
GBP/USD to NZD/USD (0.3964, or moderate)
GBP/USD to AUD/USD (0.2291, or weak)
GBP/USD to EUR/USD (0.1277, or weak)
GBP/USD to USD/JPY (0.1073, or weak)
GBP/USD to USD/CHF (0.0185, or very weak)
GBP/USD to USD/CAD (-0.3949, or moderate)
1. During the examined period GBP/USD moved to a moderate extent in the opposite direction compared to USD/CAD, while moving to a moderate extent in one and the same direction with NZD/USD.
2. GBP/USD moved almost independently compared to USD/CHF during the past week.
3. The correlation between GBP/USD and AUD/USD, GBP/USD and EUR/USD, GBP/USD and USD/JPY was insignificant.
Daily and Weekly Pivot Levels
By employing the Camarilla calculation method, the daily pivot levels for GBP/USD are presented as follows:
R1 – 1.4242
R2 – 1.4261
R3 (range resistance) – 1.4279
R4 (range breakout) – 1.4335
S1 – 1.4206
S2 – 1.4187
S3 (range support) – 1.4169
S4 (range breakout) – 1.4113
By using the traditional method of calculation, the weekly pivot levels for GBP/USD are presented as follows:
Central Pivot Point – 1.4268
R1 – 1.4415
R2 – 1.4607
R3 – 1.4754
S1 – 1.4076
S2 – 1.3929
S3 – 1.3737
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