- 56% of pending orders in a 100-pip range are to buy the pair
- 63% of traders are bullish on the Pound
- Important support level is located near 1.29
- Upcoming Events: FOMC Members Brainard, Kashkari and Kaplan speak, US Factory Orders m/m
The GBP/USD exchange rate fell in a wake of disappointing Britain's construction PMI report to continue trading in a wide-range dynamics. The US Dollar strengthened against the British Pound by 10 base points to find a temporary resistance at the 1.2950 level.
Markit reported that the UK construction PMI slumped unexpectedly to the weakest level in a year of 51.1 with the strongest hit from falling investment in the commercial sector, which reflected overall Brexit pressure on the country's economic growth. The reading was close to the 50 mark indicating stagnation within the sector, which is likely to be reached if Brexit talks keep moving forward slowly, forcing the UK firms to free up offices and sap demand for commercial projects.
FOMC Member speaches
The first data release on agenda this session was the British Services PMI at 0830GMT. The data showed that the Purchasing Managers' Index was 53.2 in August – a result slightly below the expected 53.5. Furthermore, The US is to publish monthly Factory Orders at 1400GMT. This event, however, is not considered a significant shaker for the market. Three FOMC Members are set to speak during the day, namely, the Federal Reserve Governor Lael Brainard, the President of the Federal Reserve Bank of Minneapolis Neel Kashkari and the President of the Federal Reserve Bank of Dallas Robert Kaplan at 1200GMT, 1710GMT and 2205GMT, accordingly.
GBP/USD waits for UK data
The first half of the previous trading day the currency pair, indeed, spent in a limbo between two combined support and resistance barriers. However, a sharp appreciation of the buck by 37 basis points dragged the pair down right in the middle of a short-term symmetrical triangle. It seems that this pattern formed in anticipation of a release of information on the UK Services PMI. Even though the plunge towards the 200-hour SMAs seems a more reasonable scenario from a technical perspective, everything will depend on content of the report that will be published by the Markit at 8:30 GMT.
Hourly chart
The pair has shown great reluctance to move above the bottom wedge boundary, failing to do so for the sixth consecutive session. The bearish market sentiment on Monday resulted in a southward breakout of the 55-day SMA. This sentiment is apparent today as well, as the Pound has already managed to push through the weekly PP today and stop near the 100- and the 20-day SMA.
Daily chart
Bullish sentiment slightly deteriorates
The bullish market sentiment for the GBP/USD currency pair keeps decreasing for the last trading sessions, with 63% of open positions currently being long (-4%). Meanwhile, the number of pending orders is 52% to buy the Pound (-8%).
OANDA traders are at equilibrium on Tuesday, as both short and long positions are located at the 50% mark. Meanwhile, traders at Saxo Bank remain bearish with 60% short positions (-3%).