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Forex Market: GBP/USD daily trading outlook

Yesterday’s trade saw GBP/USD within the range of 1.4617-1.4781. The pair closed at 1.4664, shedding 0.24% compared to Mondays close. It has been the 151st drop in the past 277 trading days. The daily high has been the highest level since January 4th, when a high of 1.4815 was registered. The major pair has added 1.45% to its value so far in June, following a 0.92% drop in the prior month.

At 6:33 GMT today GBP/USD was edging up 0.14% on the day to trade at 1.4684. The pair touched a daily high at 1.4695 during the early phase of the Asian trading session, overshooting the daily R2 level, and a daily low at 1.4649 during early Asian trade as well.

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

Fundamentals

United States

Yellen testifies

At 14:00 GMT the Fed Chair, Janet Yellen is expected to speak in front of the House Financial Services Committee.

Existing Home Sales

The index of existing home sales in the United States probably rose 1.1% to a level of 5.54 million in May compared to April, according to the median estimate by experts. If expectations were met, Mays level of sales would be the highest since September 2015, when the unrevised 5.55 million homes were sold. In April sales were 1.7% higher from a month ago to reach 5.45 million. Sales of new single-family houses rose at a monthly rate of 0.6% in April, while sales of condos surged 10.3%. At the same time, the average sales price was 4% higher from a month ago.

In case the index increased at a steeper monthly rate than anticipated, this would have a limited-to-moderate bullish effect on the US dollar. The National Association of Realtors (NAR) is to release the official figure at 14:00 GMT.

Bond Yield Spread

The yield on UK 2-year government bonds went as high as 0.529% on June 21st, or the highest level since May 3rd (0.536%), after which it closed at 0.523% to gain 5.2 basis points (0.052 percentage point) compared to June 20th.

The yield on US 2-year government bonds climbed as high as 0.771% on June 21st, or the highest level since June 10th (0.771%), after which it fell to 0.767% at the close to gain 2.6 basis points (0.026 percentage point) compared to June 20th.

The spread between 2-year UK and 2-year US bond yields, which reflects the flow of funds in a short term, shrank to 0.244% on June 21st from 0.270% on June 20th. The June 21st spread has been the lowest one so far this year.

Daily, Weekly and Monthly Pivot Levels

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

R1 – 1.4679
R2 – 1.4694
R3 (range resistance) – 1.4709
R4 (range breakout) – 1.4754

S1 – 1.4649
S2 – 1.4634
S3 (range support) – 1.4619
S4 (range breakout) – 1.4574

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

Central Pivot Point – 1.4252
R1 – 1.4494
R2 – 1.4630
R3 – 1.4872

S1 – 1.4116
S2 – 1.3874
S3 – 1.3738

In monthly terms, for GBP/USD we have the following pivots:

Central Pivot Point – 1.4526
R1 – 1.4722
R2 – 1.4966
R3 – 1.5162

S1 – 1.4282
S2 – 1.4086
S3 – 1.3842

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