Forex Market: GBP/USD daily trading outlook

Yesterday’s trade saw GBP/USD within the range of 1.4476-1.4619. The pair closed at 1.4539, shedding 0.29% on a daily basis. It has been the 12th drop in the past 24 trading days. The daily low has been an almost exact test of the low from April 26th. GBP/USD has added 1.43% to its value so far during the current month, following a 3.20% surge in March.

At 6:30 GMT today GBP/USD was edging up 0.23% on the day to trade at 1.4572. The pair touched a daily high at 1.4578 at 6:17 GMT, making an exact test of the range resistance level (R3), and a daily low at 1.4524 during mid-Asian trade.

On Thursday GBP/USD trading may be influenced by the following macroeconomic reports 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 22nd, probably increased to 252 000, according to market expectations, from 247 000 in the preceding week. The latter has been the lowest number of claims since the week ended on November 24th 1973, when 233 000 claims were reported.

The 4-week moving average, an indicator lacking seasonal effects, was 260 500, marking a decrease by 4 500 compared to the preceding weeks unrevised average.

The business week, which ended on April 15th has been the 59th consecutive week, when jobless claims stood below the 300 000 threshold, which suggested a healthy labor market. It has been the longest streak in almost 43 years.

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

The number of continuing jobless claims probably decreased to the seasonally adjusted 2 134 000 during the business week ended on April 15th, according to the median forecast by experts, from 2 137 000 in the preceding week. The latter has been the lowest level since November 4th 2000, when 2 110 000 claims were reported. The figure also represented a decrease by 39 000 compared to the revised up number of claims reported in the week ended on April 1st. 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 US Department of Labor is to release the weekly report at 12:30 GMT.

Gross Domestic Product – preliminary estimate

The preliminary estimate of the US Gross Domestic Product probably pointed to an annualized rate of growth of 0.7% in the first quarter of the year, according to market expectations. The final GDP estimate for Q4, reported on March 25th, pointed to an annual growth of 1.4%, a revision up compared to the second GDP estimate.

Consumer spending in the country rose 2.4% year-on-year in the fourth quarter of 2015, accelerating from a 2.0% surge in the second estimate, and following a 3.0% expansion in the third quarter.

Fixed investment rose at a final 0.4% year-on-year in Q4, up from a 0.1% expansion in the second estimate, as non-residential investment contracted 2.1% and residential investment rose 10.1%. Fixed investment was 3.7% higher in Q3 2015 compared to the same period a year ago.

US exports fell at an annualized rate of 2.0% in Q4, slowing down from a 2.7% growth in the second estimate, following a 0.7% growth in Q3. At the same time, US imports shrank 0.7% year-on-year in the fourth quarter, accelerating from a 0.6% decrease in the second estimate, following a 2.3% gain in the third quarter, according to data by the US Department of Commerce.

In case expectations were met or even a larger slowdown was reported in Q1, this would have a strong bearish effect on the US dollar. The preliminary GDP 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 – 1.4552
R2 – 1.4565
R3 (range resistance) – 1.4578
R4 (range breakout) – 1.4618

S1 – 1.4526
S2 – 1.4513
S3 (range support) – 1.4500
S4 (range breakout) – 1.4460

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

Central Pivot Point – 1.4328
R1 – 1.4526
R2 – 1.4650
R3 – 1.4848

S1 – 1.4204
S2 – 1.4006
S3 – 1.3882