- 65% of pending orders in a 100-pip range are to sell the pair
- 65% of traders are bullish on the Pound
- Market sentiment is 71% bullish
- Upcoming Events: UK Second Estimate GDP
Yesterday the exchange has expectedly broke through the weekly S1 at 1.2799 and continued to slip to the bottom. From a technical perspective, nothing prevents the pair from further downfall. However, the Pound is expected to appreciate quite significantly today after release of data on the UK GDP.
The Sterling gained 14 base points against the US Dollar, as the UK Retail Sales report showed slightly better-than-expected data. The GBP/USD currency pair rose 0.11% to be seen trading near the 1.2901 mark just for a while and then retreated to the previous level. However, on Friday morning the Pound was strong enough to repeat the post-release gains.
The Office for National Statistics revealed that Britain's retail sales surged 0.3% month-over-month in July, above expectations for a 0.2% rise, though the figure was weaker than a 0.6% registered in June. Higher food sales managed to offset a decrease in spending on other goods. Moreover, the UK retail sales are expected to show modest expansion this year, if real wage growth keeps falling behind inflation.
UK GDP release
In the early morning at 8:30 GMT the Office for National Statistics will reveal the Second Estimate of the UK GDP, which is expected to keep the 0.3% growth rate. This event might cause a notable, but short volatility in the markets, by throwing the Pound towards the 55-hour SMA and senior channel's upper boundary.
GBP/USD expectedly passes 1.2799
As forecasted on Wednesday, the British Pound continued to lose value against the American Dollar and slipped right through the weekly S1, which is located at the 1.2199 level. Such outcome additionally confirms that the pair is moving in a clearly expressed downtrend. As a result, the exchange rate has no technical indicators on its way that might force it to start moving in the opposite direction.
For instance, the closest support level, which is set up by the weekly S2, is located only at the 1.2720 level. On the other hand, at 8:30 GMT the Office for National Statistics will release a Second Estimate GDP that might cause certain volatility and lead to a short-term recovery of the Sterling.
Hourly chart
As the exchange rate does not face any support up until the 23.6% Fibonacci retracement level and is simultaneously moving in a dominant descending channel, the there are no obstacles that can stop it from the further fall.
Daily chart
Sentiment remains bullish
The bullish sentiment continues to dominate, as 71% of open positions being long. Meanwhile, 53% of pending commands in 50-pip range are to buy, while in 100-pip range 65% of orders are set to sell.
It can be observed that OANDA traders are almost neutral, as 52 % of open positions are short. Meanwhile, traders at Saxo Bank are bearish on the pair, with 57% of traders holding short positions.