- 60% of pending orders in the 100-pip range are to SELL the Sterling
- SWFX market sentiment is 68% bullish (+9%)
- No significant data releases today
A reversal to the downside is expected during the second part of the day.
The British Pound strengthened against the Greenback, following UK Construction PMI data release on Monday. The GBP/USD currency pair gained only three pips, or 0.02%, to continue going up afterwards.
The Markit released Construction Purchasing Managers' Index data that came out a little bit better-than-expected, however stayed unchanged from the previous period of 52.5.
"Higher prices for fuel, raw material shortages, higher labor costs combined with slow delivery times were further obstacles to growth as firms nervously assessed their workforce for much-needed talent and sub-contractors could name their price," said Tim Moore, Senior Economist at IHS Markit and author of the Markit/CIPS Construction PMI.
Calm day
This trading session does not include any important data releases. The US Department of Labour is set to release the weekly Unemployment Claims at 1230GMT. Meanwhile, the BOE Deputy Governor David Ramsden is due to speak at the Barclays Inflation Conference at 1500GMT.
GBP/USD likely to target 1.35
The GBP/USD exchange rate was trading sideways for the whole session on Wednesday. The upside was restricted by the monthly PP near 1.3440, while support was provided by the weekly R1 at 1.3408.The pair is trading near the upper boundaries of two short-term channels. This might point to soon decline. However, it is expected that the Pound still edges slightly higher during the first part of the day up until the 1.35 mark. Bears should subsequently lead the rate back down to the 55– and 100-hour SMAs near 1.3350.
As apparent on the daily chart, the general tendency for the following trading sessions should be north until the 200-day SMA at 1.36, at least, is reached.
Hourly chart
The Sterling has plunged 7.28% against the US Dollar since mid-April. Despite lingering near the 200-day SMA for a couple of days, downside risks prevailed and pushed the rate as low as the 1.3245 last week.
As apparent on the chart, the Pound has started to recover from its six-month low. This appreciation is expected to continue during the following two weeks, as well. The nearest significant resistance is the 61.80% Fibonacci retracement and the 200-day SMA near 1.36.
Daily Chart
The bullish SWFX market sentiment has strengthened by nine percentage points to 68% of open positions being long today. Meanwhile, 51% of pending orders are to sell the Pound.
The market sentiment of OANDA traders is strongly bullish, as 68% of them are holding long positions (-4%). Saxo Bank clients are likewise bullish with 60% long positions (+1%).
Spreads (avg, pip) / Trading volume / Volatility