- 53% of all pending orders are to sell the British
- 63% of traders are bulls
- Immediate resistance is around 1.2630
- The closest support is at 1.2558
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Upcoming Events: US Goods Trade Balance, US CB Consumer Confidence, US Preliminary Wholesale Inventories
Orders for US-manufactured long-lasting goods rose more than expected last month, official figures revealed on Friday. The US Department of Commerce reported that orders for durable goods advanced 1.7% in February, following the preceding month's upwardly revised gain of 2.3% and surpassing analysts' expectations for a 1.1% increase. Excluding transportation equipment, orders for US-manufactured durable goods climbed 0.4%, compared to the previous month's reading of 0.0%. In the meantime, market analysts anticipated a bigger gain of 0.5% during the reported period.
However, the following rise marked the sixth straight monthly increase in orders for core durable goods. Analysts suggest that businesses will improve even more if US lawmakers succeed in lowering corporate taxes and reducing regulations. Non-defence capital goods orders excluding aircraft dropped 0.1%, following January's revised climb of 0.1% and falling behind expectations for a 0.5% increase. Shipments of non-defence capital goods excluding aircraft, used in calculating GDP, advanced 1.0% last month. Data also showed that orders for civilian aircraft rose 47.6%, compared to a 83.3% surge in the prior month. Boeing reported it received 43 orders for aircraft in February, up from the previous month's 26.
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US CB Consumer Sentiment
There is not a lot of data due on Tuesday that could have a strong impact on the Cable's performance. All attention turns mostly to the US CB Consumer Confidence. It captures the level of confidence that individuals have in economic activity. A high level of consumer confidence stimulates economic expansion, while a low level drives to economic downturn. Generally, a high reading is seen as positive for the USD, while a low reading is negative.
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GBP/USD takes another shot at reclaiming 1.26
The Cable mostly behaved in accordance with expectations on Monday, with the only exception being that the pair was able to reach beyond the 1.26 major level. Nevertheless, trade closed with British currency appreciating 64 pips against the Buck, thus, reaching its four-week high. The bullish trend remains intact, with the Pound expected to outperform the US Dollar once more. Technical indicators are also giving bullish signals, confirming the possibility of the positive outcome today. However, due to lack of strong market movers, the upside development is likely to be very limited, with the immediate resistance cluster around 1.2630 preventing the Sterling from edging higher.
Daily chart
© Dukascopy Bank SA
Even though the rising wedge pattern failed to be confirmed, the ascending channel's lower boundary received the required confirmation yesterday. The channel suggests that the Cable is to continue edging higher, with the 1.27 major level being the next target, before the exchange rate bounces back again.Hourly chart
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Traders mostly bullish
Today 63% of traders are bulls (previously 60%), while 53% of all pending orders are to sell the British currency (down from 55%).
A slightly less optimistic situation is observed elsewhere. For example, 51% of positions open at OANDA are currently long. This is more than the share of shorts (49%), but not sufficient to call the sentiment bullish, instead it is neutral. Meanwhile, sentiment at Saxo Bank is also quite close to equilibrium, with 54% of traders now being long and the other 46% being short the Sterling against the US Dollar.
Spreads (avg, pip) / Trading volume / Volatility
Traders still indecisive
© Dukascopy Bank SABy the end of the next three months traders expect the Cable to fall under the 1.22 major level, as 52% of survey participants believe so. While the current price is around 1.26, the average forecast for June 27 is 1.2218. The 1.14-1.16 range is now the most popular price interval, having 16% of the votes, while on the second place are the 1.16-1.18 and the 1.30-1.32 price ranges, with 12% of poll participants choosing each of them. Furthermore, the 1.26-1.28 interval was selected by 10% of voters.