- 52% of pending orders in the 100-pip range are to SELL the Pound
- SWFX market sentiment is 66% bullish (+2%)
- Upcoming fundamental events: US Advance GDP q/q, Advance GDP Price Index q/q, Revised UoM Consumer Sentiment
The Sterling faces a strong resistance cluster which may not surrender today.
Oil prices have increased after US Crude Oil Inventories data release on Wednesday at 14:30 GMT. The five-minute candle gained 73 pips, or 1.06%, and continue fluctuating from the 68.219 area to 69.255.
The Energy Information Administration released the US Crude Stocks data that came out lower-than-expected of negative 6.1M, compare to forecasted negative 2.6M.
Olivier Jakob a Founder, Managing Director and Editor at Petromatrix said: "The passage is not as crucial as the Strait of Hormuz ... but restricted flows through it would have an impact not just for crude but also for products due to the longer voyage time that is needed to sail by the Cape".
US GDP
The only significant data release in this session is the US Advance Gross Domestic Product for the second quarter published by the Bureau of Economic Analysis at 1230GMT. The market expects a 4.2% gain on the US economy during the given period of time. The Advance GDP Price Index is published at the same time.
The University of Michigan will publish the revised consumer sentiment for July at 1400GMT.
GBP/USD falls below SMAs
The Sterling was unable to overcome the psychological 1.32 mark, thus being driven by bears during the whole session on Thursday. The rate breached the short-term ascending channel and the 55—, 100– and 200-hour SMAs, thus losing almost 100 pips along the way. This breakout should point to further decline today.There is no level limiting the pair until the distant monthly S1 at 1.3020. This means that if bears do take over the market, the Pound might be sent for a freefall down to this mark.
In terms of upside potential, the rate will need strong bullish momentum to overcome the many resistance levels apparent on both the 1H and 4H time-frames. Thus, even if the aforementioned plunge does not occur, gains should likewise be limited.
Hourly chart
During the past two months, the Pound has been weakening against the US Dollar in a descending channel. The pair breached a more senior pattern this week and thus is likely to push towards the junior one and the nearby-located 55-day SMA and the monthly R1 at 1.33 during the following trading days.
The general medium-term tendency should be north towards the 200-day SMA near 1.37. This scenario should be confirmed if the aforementioned 55-day moving average is breached. Technical indicators support this bullish scenario.
Daily Chart
The general sentiment remains strongly bullish. Some even expect to open more long positions, if the currency rate reaches certain criteria, such as breaks out from resistance on the daily chart.
The market sentiment of OANDA is 67% bullish on Wednesday (+3%). Saxo Bank clients share the same bullish sentiment with 59% of positions being long today.
Spreads (avg, pip) / Trading volume / Volatility