- 56% of pending orders in the 100-pip range are to buy
- 55% of traders are bullish on the Pound
- Important support lies near 1.3320
- Upcoming events: UK Manufacturing PMI, US ISM Manufacturing PMI
The British Pound fell significantly against the US Dollar on Friday morning, following the couple of the UK economic reports. The Sterling decreased against its American counterpart by 47 base points or 0.35% to the 1.3373 mark to fully deprive Thursday's gains.
Official projections for Britain's current account deficit showed that the gap between the entire UK income and spending widened significantly, which now is expected to reach 5.9% of GDP in the June quarter. Other figures revealed that that the UK economy expanded just 1.5% year-over-year in the Q2, the slowest growth pace since 2013. Weak service sector and growth figures sent the Pound down, appearing to cast doubts whether the BoE would raise key interest rates this year.
Manufacturing PMIs
The UK is to open this trading session with the Manufacturing PMI for the month of September released at 0830GMT. In addition, the US Institute of Supply Management is to publish its Purchasing Managers' Index at 1400GMT, among other minor data releases.
GBP/USD fails to break above 55- and 100-hour SMAs
In accordance with expectations, a combination of the 55- and 100-hour SMAs as well as the former monthly R2 did not let the pair to make any notable advances on Friday. In fact, they continued to push it to the bottom, simultaneously forcing to form a minor symmetrical triangle.
Due to release of a whole bunch of various fundamental data during this week, it is difficult to project how the pair is going to move. The only thing that can be said for sure is that the northern path is secured by numerous technical indicators, such as the 200-hour SMA and the 50% Fibonacci retracement level at 1.3503.
In addition to that, the pair has recently made a rebound from the upper boundary of a long-term descending channel. Hence, the gradual slip to the bottom remains a more plausible scenario.
Hourly chart
Being driven by solid downside risks, GBP/USD opened lower in this session. Both the monthly and weekly pivot points were re-calculated this week. Thus, the rate was trading between the weekly and monthly PPs on Monday morning. The lower side is likewise reinforced by the 20-day SMA and the weekly S1 at 1.3356 and 1.3306, respectively. By and large, the overall sentiment in the medium-term remains bearish.
Daily chart
Market sentiment is strongly bearish
SWFX market sentiment has once again turned bullish on Monday, as the number of long positions is 55%, compared to 59% on Friday. In addition, 58% of pending orders are to buy the Pound (+1%).
OANDA traders remain bearish on the Pound, as 63% of open positions are short (unchanged from Friday). Traders at Saxo Bank are likewise bearish with 65% short positions (-3%).