- 57% of pending orders in the 100-pip range are to BUY the Pound
- 61% of traders are bearish on the pair (-1%)
- Daily low should be reached around 1.4270
- Upcoming data releases: UK's CPI y/y, PPI Input m/m and RPI y/y; FOMC Members Dudley and Quarles to speak
Yesterday's bearish sentiment expected to prevail in this session, as well.
The British Pound weakened against the Greenback, following the US Average Earnings Index data release on Tuesday. The GBP/USD currency pair lost 16 pips, or 0.11%.
The Office for National Statistics released three reports simultaneously, from which the most impactful Average Earnings Index data came out lower-than-expected and instead of growing by 3.0%, it stayed in line with the previous period's 2.8% growth rate. Claimant Count Change and Unemployment Rate data came out better-than-expected, having a growth of 11.6K and 4.2% respectively. However, jobless claims grew more than in the previous month, jobless rate decreased, indicating that more people got a job than those who claimed unemployment.
British CPI
Wednesday's trading session will start with the British Consumer Price Index, Producer Price Index and Retail Price Index at 0830GMT.
Meanwhile, two speeches by FOMC members are likewise occurring today. The President of the Federal Bank of New York William Dudley is due to speak about the economic outlook and monetary policy at 1915GMT, while the Federal Reserve Governor Randal Quarles is due to speak at the Bretton Woods Committee Annual Meeting at 2015GMT.
GBP/USD trades along 55-hour SMA
After hitting the upper boundary of a short-term channel and a trend-line at 1.4370, the Sterling began its decline towards the 1.43 mark.This bearish momentum was caused primarily by sluggish US average earnings report. It caused a fall of 50 pips as a result of which the Pound breached the 55-hour SMA. However, it remained at this line during the Asia session, demonstrating that bulls are still trying to regain their lost positions. If this moving average is breached, the next target should be the weekly R2 at 1.4424.
On the other hand, the pair is supported by the 100-hour SMA near 1.4270. This line is likely to restrict a deeper fall down to the weekly PP and the 200-hour SMA at 1.42 for some time. The British CPI at 0830GMT is likely to guide the market sentiment for several hours.
Hourly chart
Following a test of the 55-hour SMA early in April, the Sterling accelerates substantially against the US Dollar. Technical indicators demonstrate that there is still some slight upside potential. Thus, the pair might still edge higher during the following session, setting the 1.44 area as a possible near-term target.
In case bears prevail this week, the pair should be pushed towards a trend-line at 1.41.
Daily Chart
The SWFX market sentiment has weakened by one percentage point on Wednesday, as 61% of open positions are short. Meanwhile, 54% of pending orders are to now to buy the Sterling.
OANDA traders remain bearish on the Pound with 63% of their open positions being short (+1%). Saxo Bank is likewise bearish with 63% of its clients holding short positions (-3%).
Spreads (avg, pip) / Trading volume / Volatility