- 64% of pending orders in the 100-pip range are to BUY the Sterling (+13%)
- SWFX market sentiment is 64% bullish (-3%)
- Upcoming fundamental events: US Final GDP q/q, US Unemployment Claims, FOMC Member Haldane and MCP Member Haldane to speak
Strong bearish momentum prevails on Thursday morning.
The Census Bureau released Durable Goods Orders Ex Transportation data that came out lower-than-expected with a forecast of 0.5% in May, and also lower from the previous period.
According to Janis Macukans, a senior analyst at Dukascopy Bank SA, such effect can be explained by the opposing Durable Goods Orders and Core Durable Goods Orders divergences from the market forecasts. The data sets cancelled out each other's effect on the currency markets.
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US Gross Domestic Product
The US Bureau of Economic Activity will publish the Final GDP data for the first quarter of 2018 at 1230GMT. The US economy is expected to have expanded by 2.2% - the same as during the preceding period. The weekly Unemployment Claims are released at the same time.
Meanwhile, two speeches are scheduled for today. The BOE Chief Economist Andy Haldane is due to speak about productivity growth at the Academy of Social Sciences at 1330GMT, while the President of the Federal Reserve of Atlanta Raphael Bostic will discuss affordable housing and jobs at the Centre for Working Families at 1600GMT.
Read More: Fundamental Analysis
GBP/USD is oversold
As already expected, the GBP/USD exchange rate was unable to breach the 200- hour SMA and the weekly PP at 1.3232 on Wednesday. This resulted in a strong bearish momentum which has pushed the rate as low as the psychological 1.31 mark by early Thursday. This level is located near the monthly S1 and a two-month channel near 1.3070.This half-day surge has pushed technical indicators on both the 1H and 4H time-frames into the oversold territory. It is likely to trigger bulls to re-open their positions which would in turn result in appreciation.
There is no resistance limiting the Pound until the aforementioned 1.3232 level. Further surge is unlikely. In case of strong US Final GDP data at 1230GMT, a subsequent fall should not exceed the eight-month low and the weekly S2 at 1.3020.
Hourly chart
By reviewing the daily chart of the GBP/USD pair it was discovered that there exists a descending channel pattern that has been in action since the middle of April.
The pair breached this medium-term channel earlier this week, thus pointing to a possible surge towards the 55- and 200-day SMAs located near 1.3650.
Daily Chart
Read More: Technical Analysis
Bullish sentiment remains strong
The SWFX market sentiment has decreased by three percentage points on Thursday, thus currently standing at 64%. Meanwhile, the number of pending orders has increased to 54% (+3%). Traders at the Swiss Foreign Exchange are generally bullish; however, this week has seen some weakening of this sentiment.
The market sentiment of OANDA remains bullish, as 59% of its traders are holding long positions (-5%). Saxo Bank clients are likewise bullish with 60% long positions (unchanged). It should be noted that institutional investors are gradually starting to abandon their bullish positions.
The market sentiment of OANDA remains bullish, as 59% of its traders are holding long positions (-5%). Saxo Bank clients are likewise bullish with 60% long positions (unchanged). It should be noted that institutional investors are gradually starting to abandon their bullish positions.
Spreads (avg, pip) / Trading volume / Volatility