- The portion of sell orders inched down from 56 to 55%
- 60% of traders hold long positions
- Immediate resistance is at 1.2570
- The closest support is around 1.2460
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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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Uneventful Monday
Monday is a quiet day in terms of fundamental data, thus, attention turns to the Tuesday's data, mostly on 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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Pound takes advantage of weak Dollar
Even though the GBP/USD pair edged lower on Friday, once again crossing the 1.25 major level to the downside, this decline was just a mere setback in the pair's bullish trend. Broad USD weakness due to Trump's failure to bring down Obamacare is allowing the Sterling to continue climbing higher. Today's intraday high is expected to be the 1.26 handle, with the monthly R1 preventing any attempts to pass beyond this mark. Furthermore, the weekly R1 and the upper Bollinger band around 1.2570 form a relatively strong resistance area as well, which is likely to contribute to limiting the Cable's rally today. Meanwhile, technical studies are in favour of the positive outcome.
Daily chart
© Dukascopy Bank SA
The rising wedge pattern has become more or less unreliable, as there has been a rather substantial violation of its lower border on Friday. However, it created an opportunity for a channel pattern to emerge, but an additional confirmation of the lower trend-line is required. Meanwhile, the Cable is expected to retest the upper one near 1.2650.Hourly chart
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Traders mostly bullish
Today 60% of traders hold long positions, barely changed since Friday (61%). The portion of sell orders inched down from 56 to 55%.
A slightly less optimistic situation is observed elsewhere. For example, 53% of positions open at OANDA are currently long. This is more than the share of shorts (47%), barely sufficient for the sentiment to be called bullish. Meanwhile, sentiment at Saxo Bank is close to equilibrium, with 52% of traders now being long and the other 48% 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 1.2550, the average forecast for June 27 is 1.2225. The 1.14-1.16 range is now the most popular price interval, having 17% of the votes, while on the second place are the 1.16-1.18 and the 1.30-1.32 price range, with 13% of poll participants choosing it.