Yesterday’s trade (in GMT terms) saw GBP/USD within the range of 1.2878-1.3053. The pair closed at 1.3046, surging 1.29% compared to Mondays close. It has been the 144th gain in the past 317 trading days and also the steepest one since August 2nd. The daily high has been a level unseen since August 10th, when a high of 1.3096 was registered. The major pair has trimmed its decline to 1.42% so far during the current month, after losing 0.59% of its value in July.
At 6:45 GMT today GBP/USD was edging down 0.11% on the day to trade at 1.3032. The pair touched a daily high at 1.3073 during the early phase of the Asian trading session, undershooting the daily R2 level, and a daily low at 1.3020 during late Asian trade.
On Wednesday GBP/USD trading may be influenced by the following macroeconomic reports as listed below.
Fundamentals
United Kingdom
Jobless Claims, ILO Unemployment Rate
The number of jobless claims in the United Kingdom probably rose by 9 500 in July from a month ago, according to market expectations. In June claims were 400 more, following a revised up increase by 12 200 in May.
The rate of unemployment in the UK, estimated in accordance with ILO (International Labour Organization) standards, probably remained at 4.9% for a second consecutive three-month period during the three months to June compared to the same period a year ago. It has been the lowest rate since the three-month period to October 2005.
During the period March-May there were 31.70 million people in employment, or an increase by 176 000 compared to the three months to February 2016. Compared to March-May 2015, the figure represented an increase by 624 000. 23.19 million persons were in full-time employment during the period March-May, or 401 000 more compared to the same period a year earlier. At the same time, 8.52 million persons were in part-time employment, or an increase by 223 000 compared to a year ago. The rate of employment was registered at 74.4%, or the highest since 1971, when records were initiated.
During the period March-May, 1.65 million people were unemployed, or a decrease by 54 000 compared to those reported during the three months to February 2016. Compared to March-May 2015, the figure represented a decrease by 201 000.
In March to May there were 8.87 million people aged between 16 and 64, who were out of work and not seeking or available for employment, according to data by the Office for National Statistics (ONS). This represented a decrease by 46 000 compared to the three-month period to February 2016 and a drop by 181 000 compared to March-May 2015.
Average earnings including bonuses probably went up 2.4% during the three months to June 2016 compared to the same period a year ago. If so, this would be the fastest rate of wage growth since the three-month period to October 2015. In the three-month period to May 2016 earnings grew 2.3% year-on-year. Pay growth has been above the rate of consumer inflation since the beginning of 2015, which led to a sound increase in real income. However, wage growth is still lower compared to the period preceding the financial crisis.
In case the rate of unemployment met expectations or fell even further while the number of claims increased at a lesser-than-projected pace in July, this would have a strong bullish effect on the Sterling. The official report by the ONS is due out at 8:30 GMT.
United States
FOMC Minutes
At 18:00 GMT the Federal Open Market Committee (FOMC) will release the minutes from its meeting on policy held on July 26th-27th. The minutes offer detailed insights on FOMC’s monetary policy stance. This release will be closely examined by market players, as it may provide clues over how the Fed’s policy tightening cycle will develop in the future. High volatility of the currency pairs containing the US dollar is usually present after the publication.
Last month the Federal Open Market Committee left the target range for the federal funds rate intact between 0.25% and 0.50%, as largely expected. Fed policy makers noted that the labor market conditions continued to improve, while short-term growth risks seemed to have diminished, thus, implying that a rate hike this year was still a possibility.
Bond Yield Spread
The yield on UK 2-year government bonds went as high as 0.195% on August 16th, or the highest level since August 4th (0.211%), after which it closed at 0.144% to add 0.003 percentage point compared to August 15th.
Meanwhile, the yield on US 2-year government bonds climbed as high as 0.758% on August 16th, or the highest level since July 27th (0.778%), after which it fell to 0.742% at the close to add 1.2 basis points (0.012 percentage point) compared to August 15th.
The spread between 2-year US and 2-year UK bond yields, which reflects the flow of funds in a short term, widened to 0.598% on August 16th from 0.589% on August 15th. The August 16th yield spread has been the highest one since August 11th, when the difference was 0.602%.
Daily, Weekly and Monthly Pivot Levels
By employing the Camarilla calculation method, the daily levels of importance for GBP/USD are presented as follows:
R1 – 1.3062
R2 – 1.3078
R3 (Range Resistance – Sell) – 1.3094
R4 (Long Breakout) – 1.3142
R5 (Breakout Target 1) – 1.3198
R6 (Breakout Target 2) – 1.3223
S1 – 1.3030
S2 – 1.3014
S3 (Range Support – Buy) – 1.2998
S4 (Short Breakout) – 1.2950
S5 (Breakout Target 1) – 1.2894
S6 (Breakout Target 2) – 1.2869
By using the traditional method of calculation, the weekly levels of importance for GBP/USD are presented as follows:
Central Pivot Point – 1.2972
R1 – 1.3041
R2 – 1.3167
R3 – 1.3236
R4 – 1.3305
S1 – 1.2846
S2 – 1.2777
S3 – 1.2651
S4 – 1.2525
In monthly terms, for GBP/USD we have the following pivots:
Central Pivot Point – 1.3171
R1 – 1.3546
R2 – 1.3858
R3 – 1.4233
R4 – 1.4608
S1 – 1.2859
S2 – 1.2484
S3 – 1.2172
S4 – 1.1860
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
