- 59% of pending orders in the 100-pip range are to SELL the pair
- SWFX market sentiment stands at equilibrium
- Gains should be capped near 1.4115
- Important for today: UK Manufacturing PMI, FOMC Member Brainard to speak
The Sterling breaches the 100-hour SMA early on Tuesday, thus adding some bullish sentiment to the market.
The Institute for Supply Management revealed the decrease in purchasing managers index of 59.3 in March, compared to 60.8 in the previous period. However, there was a decrease, the data was still positive by being above 50 and caused US dollar to strengthen. The EUR/ USD pair stepped lower just a little bit, which can be explained by the fact that there is still a holiday today and the volume is not as usual, which most probably eliminated more significant fluctuations.
British Manufacturing PMI
The only noteworthy data release in this session is the British Manufacturing PMI published by Markit at 0830GMT. The index is expected to weaken in March, compared to the preceding month with readings of 54.8 and 55.2, respectively.
Meanwhile, the Federal Reserve Governor Lael Brainard is to discuss financial stability at the Stern School of Business at 2030GMT.
GBP/USD moves in narrow channel
The British Sterling continues to move in a narrow channel against the US Dollar for the third consecutive session. This short-term pattern was formed when a bullish correction against the general bearish trend began last week. Along the way, the Pound breached the previously-existing steep channel down together with the 55-hour SMA.It seems that some upside potential still exists in the market in this session that could result in a breakout of the 100-hour moving average. The ultimate high for today should be the 1.4110 area where the 200-hour SMA is located.
In case the 55-hour SMA fails to support the rate today, the rate could struggle to surpass the 1.40 area, as the monthly PP is located nearby. The general tendency this week is likely to be south down to the senior channel at 1.3950.
Hourly chart
The Sterling has been appreciating gradually against the US Dollar since the beginning of March – the movement which has been guided by the 55-day SMA.
The previous week marked a change is sentiment, as the pair fell from its two-month high of 1.4240 towards the aforementioned 55-day moving average located at 1.40. It is likely that this line guides the pair during the following sessions, especially when being reinforced by the monthly PP, the weekly S1 and the 38.20% Fibonacci retracement. A breakout south could be followed by depreciation in the medium-term down to the 100-day SMA circa 1.38.
Daily Chart
The SWFX market sentiment stands at equilibrium today, compared to 51% short positions on Monday. Meanwhile, 55% of pending orders are to sell the Sterling.
OANDA traders have turned bullish on the Pound with 53% of their open positions being long. Yesterday, this sentiment was 51% bearish. Saxo Bank clients remain bearish with 53% short positions (has remained at the same level as on Monday).
Spreads (avg, pip) / Trading volume / Volatility