GBP/USD keeps approaching 1.23 handle

The Conference Board Consumer Confidence Index increased significantly despite experts' pessimistic forecasts. In March, it gained 8% and reached 125.6, which is the highest value since December 2000. Therefore, the number of consumers who evaluated business conditions as "good" rose from 28.3% to 32.2%. Moreover, the number of consumers who believed that there was "enough" job offers in the market also climbed from 26.9% to 31.7%. Accordingly, the number people who evaluated business conditions as "bad" decreased from 13.4% to 12.9%. In addition, the number of people who were experiencing "difficulties" finding a job slightly diminished from 19.9% to 19.5%.

Altogether, this mean that consumers believe that the current economic conditions have improved and that they are ready to increase their spending and investments. This also suggests that people are more optimistic about the near-term economic situation. For instance, the number of consumers who suggested that business conditions would improve even more in the next six months soared from 23.9% to 27.1%. At the same time, the number of consumers who suggested that more jobs would be created in the next six months also nudged from 20.9% to 24.8%.

US Pending Home Sales is the only relevant event today

GBP/USD keeps approaching 1.23 handle

In the wake of formal beginning of Brexit the GBP/USD pair began sliding down, this was seen by yesterday's bearish development when the Pound lost more than 100 pips. Despite being supported by the weekly PP, the 55 and the 100-day SMAs, the Cable is likely to edge lower again. The 1.23 major level is expected to be the bottom floor for today's trading, even though technical indicators are giving bullish signals in the daily timeframe. Ultimately, the given pair has been consolidating between 1.1950 and 1.27 since October 2016, and this trading range still remains intact, with the Sterling headed towards the lower half, namely below the 1.23 mark.

Daily chart

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Hourly chart

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Traders mostly bullish

Although not as strong as yesterday, but market sentiment remains bullish, now at 57%. The share of sell orders increased from 53 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%), but not sufficient to call the sentiment bullish, instead it is neutral. Meanwhile, sentiment at Saxo Bank is also quite close to equilibrium, with 57% of traders now being long and the other 43% being short the Sterling against the US Dollar.

Spreads (avg, pip) / Trading volume / Volatility

Traders still indecisive

© Dukascopy Bank SA

By 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 1.26, the average forecast for June 29 is 1.224. The 1.14-1.16 range is now the most popular price interval, having 14% of the votes, while on the second place are the 1.18-1.20, the 1.26-1.28 and the 1.30-1.32 price ranges, with 12% of poll participants choosing each of them. Furthermore, the 1.16-1.18 interval was selected by 10% of voters.