- 56% of pending orders in 100-pip range are to sell the pair
- 65% of traders are bullish on the Pound
- Gains could be capped near the 1.3080 mark
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Upcoming Events: UK Manufacturing Production m/m, UK Goods Trade Balance, US PPI m/m, US Unemployment Claims, US Core PPI m/m, FOMC Member Dudley speaks
The Sterling strived to offset post-NFP losses, as Monday's report revealed that the UK home prices rose more than anticipated in July. GDP/USD showed almost no reaction to the data, however, later on it posted a gradual fall to the 1.3040 mark, but then went back to the level seen before the release. Halifax reported that its House Price Index rose 0.4% month-over-month in July, surpassing expectations for a 0.3% increase.
However, experts suggested that the UK property market was relatively stagnant or cooling, as the yearly prices growth pace slowed to 2.1% in the reported period. Moreover, the demand for housing would weaken amid a slow wage growth and an ongoing shortage of available properties, which is set to boost house prices in the upcoming months.
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UK Manufacturing Production, US PPI
Today's economic calendar demonstrates an abundance of significant fundamental events, the most important of which are the UK Manufacturing Production and US PPI and Unemployment Claims at 0830GMT and 1230GMT, accordingly. In addition, the UK is set to publish monthly Goods Trade Balance at the same time as Manufacturing Production, while the US – Core PPI at 1230GMT. Finally, the President of the Federal Reserve Bank of New York William Dudley is to hold a press conference about regional wage inequality at 1400GMT.
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GBP/USD remains stable
No significant changes in GBP/USD were apparent on Wednesday, as the exchange rate remained at a relatively stable level. The Pound failed to surpass the 55-hour SMA on two occasions and therefore remained below the 1.3020 mark for the second consecutive day. Technical signals on Thursday morning suggest that the rate should not breach the weekly and monthly S1s in the 1.2940/60 area. Thus, it may fall down to the given territory and eventually reverse to the upside. Nevertheless, the economic calendar in this session is full of significant events that may shake the market in any direction. This may set today's possible trading range quite wide—between the monthly PP and the weekly S2 at 1.3085 and 1.2867, respectively.
Hourly chart
Yesterday's gains were limited, as the candle demonstrated the relatively equal force of both bulls and bears. This session has started with the latter taking the upper hand, thus pushing the rate towards the weekly and monthly S1s. In case fundamentals push the rate lower, the next target is the 55-day SMA circa 1.2925. The closest resistance on the daily chart is the 20-day SMA at 1.3070.Daily chart
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Sentiment becomes neutral
Traders have increased their bullish sentiment, with 65% of open positions being long (+6%). Meanwhile, the number of pending orders is almost at equilibrium, currently standing at 51% to sell the Pound (-4%).
In the meantime, traders at Saxo Bank have kept their sentiment at yesterday's level, with 62% of traders holding short positions. The same bearish sentiment is shared by OANDA where 59% of open positions are likewise short (-3%).
Spreads (avg, pip) / Trading volume / Volatility