Market Research and Analysis

Daily Market Analysis Report

Thu, 05 Jan 2017 05:05 AM GMT

Author: Senior Forex Analyst, Arslan Ali Butt

  • Daily Trading Range:
  • 1.2725 – 1.2350
  • Support & Resistance Levels:
  • R3: 1.261
  • R2: 1.2505
  • R1: 1.2441
  • Pivot Point: 1.2337
  • S1: 1.2232
  • S2: 1.2168
  • S3: 1.2064
  • Trading Recommendation:
  • Sell Below:  1.2375

    Take Profit:

    1st @ 1.2305

    Stop Loss @ 1.2395

GBPUSD

GBPUSD pair is trading flat to negative around 1.2325 levels despite broad based USD selling in Asia and upbeat UK data releases. Ultimate bearish pressure as the uncertainty on UK Article 50 prevails in the market, weakening the British Pound. British Prime Minister Theresa May has said she wants to trigger Article 50, the mechanism for leaving the EU, by the end of March. Moreover, the Sterling strengthened on better than expected economic figures. Especially, the Construction PMI came high at 54.2, demonstrating stronger economy comparing to the previous figure of 52.8. Whereas, the investors are still aiming for NFP- Nonfarm Payrolls as well as the Unemployment Rates releasing on Friday.

5-jan-gbp
Fundamental Overview

The UK construction companies signaled a positive end to the year, led by the fastest rise in new order volumes since January 2016. Stronger demand patterns resulted in sustained job creation and a broad-based upturn in business activity during December. However, the construction sector continued to experience intense cost pressures as suppliers passed on higher imported raw material prices. The latest rise in overall input costs was the steepest for just over five-and-a-half years. At 54.2 in December, up from 52.8 in November, the seasonally adjusted Markit/CIPS UK Construction Purchasing Managers’ Index.

GBP

  • Services PMI
  • MPC Member Haldane Speaks

USD

  • ADP Non-Farm Employment Change
  • Unemployment Claims
  • Final Services PMI
  • ISM Non-Manufacturing PMI

Technical Overview

Technically, the GBPUSD remains bullish, as the pair trade 1.2325 crossing above 50 EMA. It is likely to continue the bearish momentum and will decide further direction on major events from the U.S. The RSI value shifting lower to 38 from 47, demonstrating a slight bearish mode of the pair. GBPUSD can find resistance at 1.2375 and 1.2410. Whereas, the supports remains at 1.2310 and 1.2275.

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