Tatiana Kashyrskaia
May 31st (GMT)
Tentative GBP - Inflation Report Hearings
14:00 USD - CB Consumer Confidence
June 1st (GMT)
1st-7th GBP - Hаlifax НPI
08:30 GBР - Manufacturing PMI
12:15 USD - АDP Non-Fаrm Employment Chаnge
14:00 USD - ISM Manufacturing PMI
June 2nd (GMT)
08:30 GBР - Construction PMI
12:30 USD - Unemplоyment Claims
June 3rd (GMT)
08:30 GBР - Services PMI
12:30 USD - Nоn-Farm Emplоyment Chаnge
12:30 USD - Unеmployment Rate
14:00 USD - ISМ Nоn-Mаnufacturing PMI
At the end of the last week GBPUSD got over 3 option barriers: 1.6232, 1.6327, 1.6449. The further development implies a rally towards the next option level of resistance 1.6565, a break above which will allow the currency pair to reach 1.6743 (the high of 2011).
After the 3-day weekend, the remaining 4 trading days will be rich in significant news reports.
Traders will be mainly focused on the USA’s Nоn-Farm Emplоyment Chаnge, which keeps growing in value even though this month it is expected to decline from 244k down to 194K. The Unemployment Rate forecast remains the same (9%). АDP Non-Fаrm Employment Chаnge will help to anticipate the forthcoming employment data. The readings of the 3 preceding months showed a fairly good match with the actual data. If May’s data indicate steady growth, the expectations concerning Friday’s Nоn-Farm Emplоyment Chаnge will be confirmed.
The USA’s CB Consumer Confidence is expected to reach the 3-month high. The confidence improved because of more stable gasoline prices but it is still fragile and may decline again.
The ISM will release its Manufacturing and Non-Manufacturing PMI reports. The manufacturing index will probably keep indicating further expansion of production, though it may be slower because of interrupted supplies caused by bad weather conditions. The index is expected to reflect the shortage of components in the motor industry after the earthquake in Japan. Economists forecast that the lack won’t last too long as the Japanese manufacturers are going to make up leeway in the second part of the year. The service sector, which makes up almost 90% of the national economy, is expected to be less affected and show an increase from 52.8 up to 53.7.
The Initial Unemployment Claims report for the week is expected to grow by 3K. The Midwest of the USA is affected by floods and tornados, which cause serious damage. It may influence the amount of the unemployment claims within the next few weeks.
The Fed Res representatives are not expected to make any significant statements during the week. At the moment the US Treasury takes urgent steps to prevent the public debt form exceeding the limit set by the Congress.
Another major news report influencing the volatility of GBPUSD is the BoE’s Inflation Report Hearings. The MPC publishes its report on the decisions made to curb the inflation and won’t let it exceed the limits set by the government. The time of the hearings varies within a couple of hours, which are usually attended by high volatility.
On June 1st and 3rd Markit Economics will publish its Manufacturing PMI and Services PMI reports. The subscribers of Thomsоn Reutеrs get the data 2 min before the major release. That is why the early reaction to the news is usually the trading activity performed by these subscribers. The manufacturing index is expected to decline a little down to 54.3pts while the service index will probably grow up to 54.4pts. Moreover on June 2nd Markit Economics will publish its Construction PMI report, which is expected to show an increase up to 53.8pts.
The last major news event scheduled for the week is Hаlifax НPI. The exact release date is announced shortly before the release itself. The value is believed to grow from -1.4% up to 0.4%.
So, GBPUSD started the last week by declining from 1.6248 and lost 191pts on Monday but then the currency pair began to rally and reached 1.6508 at the end of the week after passing 451pts. This is the max weekly range since the beginning of 2011.
The option levels of support are 1.6449, 1.6327, 1.6232. the closest option levels of resistance are 1.6565, 1.6727.
Provided by the Department of Options,
Tatiana Kashyrskaia
