- Pending orders in the 100-pip range are at equilibrium
- SWFX market sentiment is neutral
- Important for today: British Construction PMI, ADP Non-Farm Employment Change, ISM Non-Manufacturing PMI, FOMC Member Mester to speak
The Pound continues to move in a narrow range between the 55-, 100- and 200-hour SMAs.
The British Pound strengthened against the Greenback, following the UK manufacturing PMI data release on Tuesday. The GBP/USD currency pair gained only six pips, or 0.04%, to continue fluctuating in the 1.4082 area.
The Markit revealed better-than-expected data in Britain's purchasing managers index in March. The PMI stepped up to 55.1, compared to downwardly revised 55.0 in the prior period. In quarter-to-quarter basis factory output rose only by 0.4 to 0.5 percent, showing the slowdown from 1.3 percent in the last quarter of 2017. The slowdown was caused mainly because of the decrease in consumer demand, which again was caused by higher inflation rate.
Important data sets
Wednesday's trading session will start with the British Construction PMI published by Markit at 0830GMT. Analysts expect that the index should weaken to 50.9 in March, compared to 51.4 during the preceding month.
The United States will release two data sets in this session, namely, the ADP Non-Farm Employment Change and the ISM Non-Manufacturing PMI at 1215GMT and 1400GMT, respectively. In addition, the President of the Federal Bank of Cleveland Loretta Mester is due to speak about diversity in economics at Central State University at 1500GMT.
GBP/USD indecisive in this session
Despite showing high volatility, GBP/USD remained located above the 55-hour SMA on Tuesday and has therefore maintained its movement in a narrow ascending channel.As a result, the Pound was located between the 55-, 100– and 200-hour moving averages and the weekly PP this morning. The 55– and 100-period SMAs on the 4H time-frame are likewise bounding the rate.
This session includes three sets of noteworthy fundamental releases that are likely to introduce volatility in the market. It is expected that a breakout from any of the two barriers would direct the rate's further direction today. In case the 200-hour SMA at 1.4105 is surpassed, the Sterling should target the breached channel line circa 1.4150.
On the other hand, a move below its nearest support at 1.4020 is likely to push the Pound down to 1.40.
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 for the second consecutive session. Meanwhile, 51% of pending orders are to sell the Sterling (-3%).
OANDA traders have turned bullish on the Pound with 52% of their open positions being long (+1%). Meanwhile, Saxo Bank clients still remain bearish with 51% short positions (-2%).
Spreads (avg, pip) / Trading volume / Volatility