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Forex Market: GBP/USD daily trading outlook

Yesterday’s trade saw GBP/USD within the range of 1.4007-1.4171. The pair closed at 1.4131, shedding 0.18% on a daily basis. It has been the 38th drop in the past 68 trading days and also a second consecutive one. The daily low has been the lowest level since March 2nd, when a low of 1.3912 was registered. GBP/USD has dropped 1.49% so far during the current month, following a 3.20% surge in March.

At 6:18 GMT today GBP/USD was edging up 0.15% for the day to trade at 1.4152. The pair touched a daily high at 1.4157 at 6:15 GMT, undershooting the daily R2 level, and a daily low at 1.4108 during mid-Asian trading session.

On Thursday GBP/USD trading may be influenced by the following macroeconomic reports and other events as listed below.

Fundamentals

United States

Initial, Continuing Jobless Claims

The number of people in the United States, who filed for unemployment assistance for the first time during the business week ended on April 1st, probably decreased to 270 000, according to market expectations, from 276 000 in the preceding week. The latter has been the highest number of claims since the business week ended on February 26th, when a revised down number of 277 000 claims was reported.

The 4-week moving average, an indicator lacking seasonal effects, was 263 250, marking an increase by 3 500 compared to the preceding weeks unrevised average.

The business week, which ended on March 25th has been the 56th consecutive week, when jobless claims stood below the 300 000 threshold, which suggested a healthy labor market. This has been the longest streak since 1973.

Initial jobless claims number is a short-term indicator, reflecting lay-offs in the country. In case the number of claims met expectations or fell further, this would have a moderate bullish effect on the US dollar.

The number of continuing jobless claims probably rose to the seasonally adjusted 2 189 000 during the business week ended on March 25th from 2 173 000 in the preceding week. The latter has been the lowest number of claims since the business week ended on November 20th 2015, when 2 161 000 claims were reported. The figure also represented a decrease by 7 000 compared to the revised up number of claims reported in the week ended on March 11th. This indicator reflects the actual number of people unemployed and currently receiving unemployment benefits, who filed for unemployment assistance at least two weeks ago.

The Department of Labor is to release the weekly report at 12:30 GMT.

Change in consumer lending

The money amounts, borrowed by US consumers probably increased by USD 14.00 billion in February, according to market expectations, following a surge by USD 10.54 billion in January. Revolving credit decreased by USD 1.05 billion in February, compared to a revised down increase by USD 5.47 billion in January. At the same time, non-revolving credit increased by USD 11.59 billion in February, following a revised up surge by USD 15.92 billion in January.

Given the current state of the economy, a higher-than-expected amount borrowed is usually considered as dollar positive, as it implies a potential increase in consumer spending and accelerated growth, respectively. The Board of Governors of the Federal Reserve is to release the official numbers at 19:00 GMT.

Fed Chair Yellens statement

At 21:30 GMT Federal Reserve Chair Janet Yellen is expected to take a statement. Since market players will be paying a close attention to this event in search of clues over how the policy tightening cycle may develop in the future, a moderate-to-high volatility of the currency pairs containing the US dollar is expected.

Daily and Weekly Pivot Levels

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

R1 – 1.4146
R2 – 1.4161
R3 (range resistance) – 1.4176
R4 (range breakout) – 1.4221

S1 – 1.4116
S2 – 1.4101
S3 (range support) – 1.4086
S4 (range breakout) – 1.4041

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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