- 52% of pending orders in the 100-pip range are to SELL
- 52% of traders are bearish on the Sterling
- Strong resistance area circa 1.3830
- Bank Holiday in US, MPC Member Tenreyro to speak
The US retail sales rose in December, as consumers bought more goods and the previous month's figures were revised up, indicating that the country's economy finished 2017 with solid momentum.
The Commerce Department stated that retail sales increased 0.4% in December, following an upwardly revised 0.9% gain previously. Data was likely to bolster expectations of a stronger increase in consumer spending in the Q4. Consumer spending, which contributes for more than 60% of the US economic activity, grew at a 2.2% yearly rate in the Q3.
US Bank Holiday
Banks in the US are closed due to Martin Luther King Day. Meanwhile, the External BOE MPC Member Silvana Tenreyro is due to speak at Queen Mary University of London at 1815GMT.
GBP/USD approaches 1.38 mark
GBP/USD is likewise taking advantage of the weaker US Dollar, thus managing to surge 1.49% in a matter of one session. The biggest gains were apparent during the second half of Friday, while this session started with the Pound trading sideways with low volatility.
From theoretical point of view, the pair breached a six-week channel during the previosu session, thus pointing to a possible price decline down to the 1.3850 area. Converging technical indicators likewise support this scenario.
Given that there is a bank holiday in the US, it is likely that no massive changes to the pair's movement are to happen today. The Sterling might remain fluctuating between the weekly R1 and the monthly R2 at 1.3832 and 1.3707, respectively, during the whole session.
Hourly chart
The Sterling appreciated substantially against the US Dollar on Friday, thus dashing through various resistance levels. The rate could still edge higher in this session, but it should nevertheless remain below the psychological 1.38 mark.
It is expected that the bearish sentiment prevails during the following sessions and thus send the pair towards 1.36.
Daily chart
The SWFX sentiment has turned bearish in this session, as 52% of traders are holding short positions. Meanwhile, 53% of pending orders are to buy the Sterling (-1%).
OANDA traders have increased their bearish sentiment by three percentage points today with 58% short positions. Saxo Bank clients share the same sentiment with 67% short positions (+3%).
Spreads (avg, pip) / Trading volume / Volatility