- 64% of pending orders in the 100-pip range are to SELL the Sterling
- SWFX market sentiment is 58% bullish
- UK data released each day of the week
The short term pattern of the Pound against the US Dollar has been broken due to European politics. Namely, the relations between Germany and the UK have created a fall of the Pound.
The British Pound strengthened against the Greenback, following the UK Service PMI data release on Wednesday at 08:30 GMT. The GBP/USD currency pair gained 25 pips, or 0.19%, to continue fluctuating in the 1.3209 area.
The Markit released the monthly UK Purchasing Managers' Index data that came out better-than-expected of 55.1, and also better from the previous period.
A currency analyst at TorFX Laura Parsons stands: "A combination of better-than-forecast UK construction data and worse-than-expected Eurozone retail sales figures kept the GBP/EUR exchange rate steady on Tuesday,"
A UK release almost each morning
This week is the first of the month. That means that almost each day there will be an UK event that is worth covering. For the first third days of the week the Purchasing Managers Indexes of the United Kingdom were released each morning at 08:30 GMT. The reviews of these releases are already available in the Fundamental Analysis section.
Meanwhile, note that on Thursday the Governor of the Bank of England gave a public speech at 10:00 GMT.
The end of the week brought another, although minor, data release in the UK. The Halifax HPI was released at 07:30 GMT.
GBP/USD breaks junior pattern
Due to political fundamental the GBP/USD pair has declined and broken the junior ascending pattern. Namely, the German Chancellor Angela Merkel slammed the Prime Minister of the United Kingdom in a way that the markets saw as destructive for the British currency.Such events usually ignore all technical indicators. This was no exception. However, if one practices proper risk management by using stop losses, large losses are avoided.
Meanwhile, note that the 55-hour SMA did manage to provide support.
Hourly chart
By reviewing the daily chart of the GBP/USD pair it was discovered that there exists a descending channel pattern that has been in action since the middle of April. The recent rebound managed to break this pattern.
Due to that reason it is assumed that there is a larger, dominant pattern lacking from the picture, as the already broken pattern has to be a junior representation of a larger price movement.
Daily Chart
The bullish market sentiment of OANDA has increased, as 68% of its traders are holding long positions (-2%). Saxo Bank clients are likewise bullish with 62% (+1%) long positions.
Spreads (avg, pip) / Trading volume / Volatility