- Pending orders in 100-pip range from the current market is currently negative (44% bullish / 56% bearish)
- The pair could fall in value, with the closest support at 1.5542 (2014 low)
- An advance is also a possibility, but it should be limited by the weekly PP at 1.5654
- Upcoming events: US Core Durable Goods Orders, US Final GDP, US New Home Sales, UK
Today we are waiting for UK's final GDP and current account; however, UK public finances improved considerably in November, as the central government borrowed less, while more tax receipts were received. The Office for National Statistics said public sector net borrowing, which strips out state-controlled banks, totaled 14.1 billion pounds in November, down 10% from the previous year. The improvement was driven largely by less central government borrowing as tax receipts in November advanced by 5.5%, compared with the last year's data. Tax receipts in November were boosted mostly by an increase in indirect taxes including VAT, income tax and stamp duty, the ONS said.
At the mean time, American home re-sales plunged to the lowest level in six months in November following two consecutive months of solid growth, highlighting uneven recovery in the residential real estate. Sales of previously owned homes slumped 6.1% to a 4.93 million annual rate last month, the weakest level since May, down from 5.25 million in the preceding month, the National Association of Realtors said. November's sales, however, edged up 2.1% from the previous year and followed a particularly strong October, when sales rose to their highest level of the year. November's sharp drop is unlikely to signal the beginning of a weakening trend, while partly reflects low inventories, which declined to the lowest level in eight month, providing buyers with limited options. However, that impelled economists to lower the fourth-quarter gross domestic product forecast by at least one-tenth of a percentage point to around a 2.6% annual rate, referring to reduced brokers' commissions.
The most important day of the week is here
Probably, this will be the only day in the week, when some volatility could be anticipated, other than that week will be very calm and tranquil, since the Christmas holidays are starting. Today, on Tuesday, US core durable goods orders, UK's current account and both nation final GDP will be released.
GBP/USD slides towards 2014 low
Already for more than a month GBP/USD is testing the strength of the down-trend, especially its upper trend-line, that started to take its shape on July, when the pair reached a six-year high at 1.7193. The pair has returned to trade inside the boundaries of the down-trend, after breaching it to the upside. The pair is hovering around the lower levels this year, namely around 1.1550 and there still is a downside risk of the pair falling lower, since it is back on its down-trend.Daily chart
The British Pound continues to under-perform against the US Dollar, as it has dipped below the 1.56 level today. The pair's bulls will have to wake up and to push the pair higher so that it would not reach the lowest level this year at 1.5542; however, there still is relatively high possibility of the pair approaching the level, especially, with the bearish weekly technicals.
Hourly chart
Bullish positions increase, while pending orders set to sell
Concerning the orders, 56% of them are set to sell the Sterling against the US counterpart. It proclaims that, if the pair appreciates, in the near-term it may be stopped by the weekly PP and down-trend's resistance level; moreover, these levels could push the pair downwards.
Although, if the pair returns to trade in the boundaries of the down-trend then the first wave of the bearish pressure could be stopped by this year's low at 1.5542.
Spreads (avg,pip) / Trading volume / Volatility
Community expects Pound to slide lower
Jignesh, one of the community members participating in the survey, sees the pair depreciating towards the 1.55 mark "GBP/USD has faced rejection off a downwards trend line on the 1H and continues it's bearish momentum. 1.5500 should offer decent support for the pair". However, he adds that "Wednesday's FOMC will be a big driver for the USD".
Meanwhile, traders, who were asked regarding their longer-term views on GBP/USD between Nov 11 and Dec 11 expect, on average, to see the currency pair at 1.5721 by the mid-March. Though the largest portion of participants, namely 17% of them, believe the exchange rate will rebound to the 1.60/1.62 region in sixty days. Additionally, 45% of the market participants see the pair falling below the 1.56 mark.