- 54% of all pending orders are to buy the Pound
- 63% of all open positions are long
- Possible upside limit rests at 1.3180
- Significant support rests circa 1.3001
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Upcoming Events: US Empire State Manufacturing Index
Consumer prices in the United States were flat, while retail sales dropped for the second consecutive month in June. The Labour Department reported on Friday that its CPI registered an unchanged reading in the observed month, missing market expectations for a 0.1% rise, as the cost of mobile services and gasoline declining. On a yearly basis, the index surged 1.6% in June, continuing to ease from February's 2.7%, when it showed the strongest gain in five years. Furthermore, the so-called core inflation rose by the same margin of 0.1% for the third straight month.
Meanwhile, the country's retail sales registered a 0.2% drop in the reported month, affected by declines in receipts at supermarkets, clothing stores and service stations. Data showed the largest monthly fall of 1.3% in gas station sales. Overall, economists suggested that the weaker-than-expected reports are set to diminish expectations for the Fed to raise interest rates for the third time this year, with inflation being the main uncertainty factor to define the course of further monetary policy changes.
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Economic calendar clear today
This trading session is considered to be calm due to lack of fundamental events that may shake tremendously the GBP/USD currency pair. The only set of data today is the US Empire State Manufacturing Index at 1230GMT. The given measure is comprised of a survey of around 200 manufacturers in the state of New York who assess the relative level of business conditions.
Read More: Fundamental Analysis
GBP/USD changes direction
The slight appreciation that guided GBP/USD since last Wednesday changed tremendously mid-Friday when the Pound surged against the US Dollar for three consecutive hours, thus closing the session with a 158-pip gain. This appreciation, however, was not sustainable, as the power game between bears and bulls normalised. On Monday morning, the Sterling demonstrated increasing signs that the upward momentum was over, as technical indicators were starting to retrace from the strongly bullish area. Thus, a rising wedge patter was revealed. It is not yet said that the pair will depreciate with high velocity, as there are no significant data released today that could pressure it either direction. Thus, it is likely that the Sterling remains fluctuating around the 20-hour SMA in the 1.3100/10 area.
Hourly chart
GBP/USD has changed its direction on Monday, starting the session with slight losses. Intraday signals suggest a possible down-trend, thus it is likely that the Sterling fails to close with gains. The closest resistance is formed the 38.2% Fibo at 1.3146, while support rests at 1.2883.Daily chart
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Market sentiment remains neutral
Market sentiment is bullish on Friday, as 63% of open positions are long (64% on Friday). In addition, 54% of set up orders are to buy the Pound.
On the contrary, traders at Saxo Bank are bearish on the pair, with 67% of traders holding short positions (66% on Friday). Moreover, 60% of OANDA clients hold short positions.
Spreads (avg, pip) / Trading volume / Volatility
Traders see Pound falling
© Dukascopy Bank SAThe majority of traders believe that the Cable may fall below the 1.30 mark three months from now, as 60% of survey participants share this belief. The current spot price is around 1.3070, while the average forecast for October 17 is 1.2920 (1.2863 on Friday). The 1.24-1.26 range remains the most popular price interval, having 40% of the votes (+9%).