- 59% of all pending orders are to sell the British Pound
- 65% of traders hold long positions
- Immediate resistance is at 1.2342
- The closest support is at 1.2250
- Upcoming Events: US Pending Home Sales, US Initial Jobless Claims, US Goods Trade Balance, US Crude Oil Inventories
Americans became more optimistic about the economy in December since the postelection bump in confidence continues. As data suggest the US consumer confidence reached its highest in more than 15 years during the previous week as Americans expect more strength ahead in business conditions, stock prices and the job market following the election of Donald Trump as president in November. According to the Conference Board the Consumer Confidence Index advanced to 113.7 in December from an upwardly revised 109.4 in November. Meanwhile, the data topped estimates in a Reuters poll for a reading of 109.0. Another reason for the gain in confidence is surging optimism among older Americans. Economists follow confidence indicators because upbeat consumers are more likely to increase personal spending, which makes up most of the US economy.
In the meantime, house prices continued their steady recovery in October, as another spike in borrowing costs after Donald Trump's victory.
US Pending Home Sales is the only event
Wednesday brings only one relevant event, namely the US Pending Home Sales. Released by the National Association of Realtors, it is a leading indicator of trends of the housing market in the US. It captures residential housing contract activity of existing single-family homes. As the housing market is considered as a sensitive factor to the US economy. It generates some volatility for the USD.
GBP/USD in tight range between 1.2250 and 1.23
Once again the GBP/USD currency pair remained relatively unchanged, retaining its position below the 1.23 mark. No major changes are likely to occur ahead of the end of the year, thus, with the Cable expected to remain flat for another day. The 1.23 major level appears to be providing strong psychological resistance, whereas the monthly S1 at 1.2251 acts as a tough support. Downside risks are somewhat higher, as the Sterling has been declining against the US Dollar for nearly four weeks now and technical indicators also suggest that bears are to prevail today. In case the monthly S1 is pierced, the next target will be the trend-line at 1.2170.
Daily chart
On the hourly chart the picture remains unchanged, as the GBP/USD pair keeps sliding down, occasionally bouncing from the trend-line. At the same time, the 200-hour SMA is providing immediate resistance, expected to keep the pair at bay.
Hourly chart
Traders mostly bullish
There are 65% of traders holding long positions today (previously 63%). Meanwhile, 59% of all pending orders are to sell the British Pound.
A similar situation is observed elsewhere. For example, 60% of positions open at OANDA are currently long. This is more than the share of shorts (40%), more than sufficient for the sentiment to be called bullish. Similarly, sentiment at Saxo Bank is also bullish, with 64% of traders being long and 46% иуштп short the Sterling against the US Dollar.
Spreads (avg, pip) / Trading volume / Volatility
Traders expect the Cable to keep falling
By the end of the next three months traders expect the Cable to fall under the 1.26 major level, as 58% of survey participants believe so. While the current price is around 1.23, the average forecast for March 28 is around 1.2504. However, the 1.16-1.18 interval is now the most popular one, having 16% of the votes, while on the second place is the 1.18-1.20 price range, with 14% of poll participants choosing it.