- 55% of pending orders in the 100-pip range are to BUY
- 65% of traders are bullish on the Pound (+4%)
- Nearest resistance is located circa 1.3180
- Upcoming events: UK Public Sector Net Borrowing, US Existing Home Sales, Fed Chair Yellen to speak
The British Pound fell sharply against the Greenback on the report showing stronger-than-expected drop in the country's retail sales. GBP/ USD marked a 0.21% decrease to the 1.3151 level to finish the session at the same level. The pair's Friday trading started with sharp decline overshadowed by news supportive for Dollar.
The Office for National Statistics reported that the volume of the UK retail sales dropped unexpectedly 0.8% in September, putting the quarterly growth to the weakest yearly rate since 2013. Consumer demand was uncertain, though pre-Christmas sales are likely to change the situation. Moreover, questions arose about wheteher the Bank of England would hike rates for the first time in a decade.
Fed Chair Yellen due to deliver speech
The last day of this trading week will start the British Public Sector Net Borrowing for September published by the Office for National Statistics at 0830GMT. In addition, the US is to release data on Existing Home Sales for the same period at 1400GMT.
The main event of this session is the Federal Reserve Chair Janet Yellen's speech ‘Monetary Policy Since the Financial Crisis' at 2330GMT; audience questions are expected.
GBP/USD falls to 1.3110
Due to signs of negative temps of growth of the British retail sales, the Pound continued to depreciate against the Dollar. In result of the downfall, the cable slipped to the 1.3100 zone but then made a rebound, which confirmed existence of a large ascending channel.
Such outcome suggests that the pair is likely to climb back to the area near the 1.3160 mark. In larger perspective the further recovery of the Sterling seems complicated, as northern side is reliably protected not only by a combination of moving averages, but also by the upper-trend line of a dominant descending channel, which most probably will prevail over less robust ascending channel.
On the other hand, expectations of a possible interest rate hike and uncertainty related to Brexit negotiations do not make this scenario undoubted.
Hourly chart
The Pound continued to depreciate against the Greenback early on Friday, thus approaching the lower boundary of a medium-term channel. Thus, it is likely that this channel is reached during next week.
Along the way, the rate dashed through the 38.2% Fibo, the 55-day SMA and the weekly S1 circa 1.3140. The next support is the distant 100-day SMA near 1.3040.
Daily chart
Bulls become stronger
The bullish SWFX market sentiment has increased on Friday, thus currently standing at 65% (+4%). In addition, 59% of pending orders are to buy the pair (+6%).
The market sentiment of OANDA traders are at equilibrium in this session with 50% of open positions being both long and short. Meanwhile, Saxo Bank clients are still in favour of a fall, as the number of short positions continues to be 61%.