Forex Market: GBP/BGN trading outlook for July 4th

Written by Miroslav Marinov

Miroslav Marinov, a financial news editor at TradingPedia, is engaged with observing and reporting on the tendencies in the Foreign Exchange Market, as currently his focus is set on the major currencies of eight developed nations worldwide.

, | Updated: October 30, 2024

Friday’s trade saw GBP/BGN within the range of 2.3257-2.3523. The pair closed at 2.3298, shedding 0.66% compared to Thursdays close. It has been the 11th drop in the past 21 trading days and also a second consecutive one. The daily low has been the lowest level since December 18th 2013, when a low of 2.3095 was registered. In weekly terms, GBP/BGN lost 3.32% of its value during the current week. It has been the 17th drop in the past 26 weeks, a second consecutive one and also the sharpest one since the week ended on January 25th 2009, when the pair depreciated 4.17%. The exotic cross fell 7.80% in June, following two consecutive months of gains.

On Monday (July 4th) GBP/BGN trading may be influenced by the following macroeconomic report listed below.

Fundamentals

United Kingdom

Construction PMI

Activity in United Kingdom’s sector of construction probably increased at a slower rate in June compared to a month ago, with the corresponding Purchasing Managers Index coming in at a reading of 50.5, according to market expectations, down from 51.2 in May. If so, June would be the 38th consecutive month, when the gauge inhabited the area above 50.0, but it would also mark the lowest PMI level since April 2013. 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. In case, however, the PMI slowed down more than projected in June, 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.

Correlation with other currency pairs

Taking into account the business week ended on July 1st and the daily closing levels of the currency pairs involved, we come to the following conclusions in regard to the strength of relationship:

GBP/BGN to USD/CHF (0.9215, or very strong)
GBP/BGN to GBP/USD (0.7006, or strong)
GBP/BGN to USD/CAD (0.3228, or moderate)
GBP/BGN to USD/BGN (0.3113, or moderate)
GBP/BGN to USD/JPY (0.2414, or weak)
GBP/BGN to EUR/USD (-0.2838, or weak)
GBP/BGN to AUD/USD (-0.3869, or moderate)
GBP/BGN to NZD/USD (-0.4647, or moderate)
GBP/BGN to CHF/BGN (-0.5580, or strong)

1. During the examined period GBP/BGN moved almost equally in one and the same direction with USD/CHF.

2. GBP/BGN moved strongly in one and the same direction with GBP/USD during the week, while moving strongly in the opposite direction compared to CHF/BGN.

3. The correlation between GBP/BGN and USD/JPY, GBP/BGN and EUR/USD was insignificant.

4. GBP/BGN moved to a moderate extent in one and the same direction with USD/BGN and USD/CAD during the period in question, while moving to a moderate extent in the opposite direction compared to AUD/USD and NZD/USD.