Friday’s trade (in GMT terms) saw GBP/USD within the range of 1.1491-1.2625. The pair closed at 1.2435, plummeting 1.43% compared to Thursdays close. It has been the 191st drop in the past 355 trading days, a second consecutive one and also the steepest one since September 16th. The daily low has been a level unseen since March 1985. In weekly terms, GBP/USD lost 4.18% of its value during the past week. It has been the 21st drop in the past 40 weeks and also the sharpest one since the week ended on June 26th. The major pair has increased its slump to 4.18% so far during the current month, after losing 1.23% in September.
At 7:29 GMT today GBP/USD was edging down 0.46% on the day to trade at 1.2378. The pair touched a daily high at 1.2446 during the early phase of the Asian trading session and a daily low at 1.2366 during early European trade.
No relevant macroeconomic reports and other events, which may influence GBP/USD trading, are scheduled on Monday.
Correlation with other Majors
Taking into account the business week ended on October 7th and the daily closing levels of the major currency pairs, we come to the following conclusions in regard to the strength of relationship:
GBP/USD to AUD/USD (0.8424, or very strong)
GBP/USD to NZD/USD (0.7183, or strong)
GBP/USD to EUR/USD (0.3362, or moderate)
GBP/USD to USD/JPY (-0.4265, or moderate)
GBP/USD to USD/CHF (-0.5098, or strong)
GBP/USD to USD/CAD (-0.9884, or very strong)
1. During the examined period GBP/USD moved strongly in one and the same direction with NZD/USD, while moving strongly in the opposite direction compared to USD/CHF.
2. GBP/USD moved almost equally in one and the same direction with AUD/USD during the past week.
3. GBP/USD moved almost equally in the opposite direction compared to USD/CAD during the period in question.
Bond Yield Spread
The yield on UK 2-year government bonds went up as high as 0.212% on October 7th, or the highest level since September 14th (0.212%), after which it closed at 0.184% to add 5.5 basis points (0.055 percentage point) compared to October 6th.
Meanwhile, the yield on US 2-year government bonds climbed as high as 0.878% on October 7th, or the highest level since June 3rd (0.899%), after which it fell to 0.838% at the close to lose 1.6 basis points (0.016 percentage point) compared to October 6th.
The spread between 2-year US and 2-year UK bond yields, which reflects the flow of funds in a short term, narrowed to 0.654% on October 7th from 0.725% on October 6th. The October 7th yield spread has been the lowest one since September 23rd, when the difference was 0.651%.
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 – 1.2539
R2 – 1.2643
R3 (Range Resistance – Sell) – 1.2747
R4 (Long Breakout) – 1.3059
R5 (Breakout Target 1) – 1.3423
R6 (Breakout Target 2) – 1.3662
S1 – 1.2331
S2 – 1.2227
S3 (Range Support – Buy) – 1.2123
S4 (Short Breakout) – 1.1811
S5 (Breakout Target 1) – 1.1447
S6 (Breakout Target 2) – 1.1208
By using the traditional method of calculation, the weekly levels of importance for GBP/USD are presented as follows:
Central Pivot Point – 1.2443
R1 – 1.2940
R2 – 1.3444
R3 – 1.3941
R4 – 1.4437
S1 – 1.1939
S2 – 1.1442
S3 – 1.0938
S4 – 1.0433
In monthly terms, for GBP/USD we have the following pivots:
Central Pivot Point – 1.3113
R1 – 1.3312
R2 – 1.3645
R3 – 1.3844
R4 – 1.4042
S1 – 1.2780
S2 – 1.2581
S3 – 1.2248
S4 – 1.1914
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