- 53% of pending orders in the 100-pip range are to SELL
- 53% of traders are bearish on the Sterling (-2%)
- Important support cluster lies circa 1.33
- Upcoming events: UK MPC Member Haldane and FOMC Member Kashkari to speak, US New Home Sales
The Sterling was seen slightly stronger against the US Dollar, after the UK GDP growth report came in on Thursday. The GBP/USD currency pair added 17 base points or 0.13% to 1.3308 to continue fluctuating between the 1.3290 and 1.3315 marks.
The Office for National Statistics said that the second estimate for the Britain's GDP growth confirmed a 0.4% quarterly growth pace in the three months period to September. Consumer spending was the largest contributor to the increase, despite relatively solid inflation growth since the Pound's weakening after the Brexit vote. However, some questions arise that the country's reliance on consumer demand would not last with higher possibility of further weakening in household's spending.
Quiet session
This trading session includes two speeches and a US data release of intermediate importance. The BOE Chief Economist Andy Haldane is set to speak about the bank's education and communication strategy at 1430GMT, while the President of the Federal Reserve Bank of Minneapolis Neel Kashkari will speak at Winona State University's Town Hall Forum at 2230GMT.
In addition, the US Census Bureau is to release data on New Home Sales for the month of October at 1500GMT.
GBP/USD surges to 1.3360 but then retreats
On hourly chart the British Pound is continuing to gain value against the Dollar in a two-week long ascending channel.
Generally, the cable is projected to continue heading to the top in the above pattern using support continuously provided by the rising 55- and 100-hour SMAs. The ultimate goal is located near the 1.3430 level and presents location of the upper boundary of a long-term dominant descending channel.
However, before that the surge of the currency rate is likely to be stopped in the 1.3370-1.3380 resistance area. In case of retreat, strengthening of the buck in unlikely to exceed the 1.3300 mark, as this support zone is backed up by the updated weekly PP and the above 100-hour SMA. Finally, the only macro release, which might cause notable volatility will the US Prelim GDP to be released on Wednesday.
Hourly chart
The Pound continues to appreciate against the US Dollar during the past two weeks. Technical indicators suggest that there is still some upside potential for the pair that might guide the pair for a re-test of the upper channel line circa 1.324.
In terms of this session, the pair is expected to remain between the weekly PP and R1, as this range has constrained the pair since last Thursday.
Daily chart
Bears strengthen their positions
The SWFX market sentiment remains bearish this Monday, as 53% of open positions are short (-2%). Meanwhile, 52% of pending orders are to buy the Pound.
OANDA traders are bearish on the Sterling, as 51% of open positions are short in this session (unchanged from Friday). In addition, Saxo Bank clients share the same sentiment with 68% short positions (+1%).