- 76% of pending orders in the 100-pip range are to buy the pair
- 57% of traders are bullish on the Pound
- Important resistance level is located near 1.3208
- Upcoming events: UK CPI y/y ,UK PPI Input m/m, UK RPI y/y, US JOLTS Job Openings
The GBP/USD currency pair showed modest reaction on the UK economic releases on Friday, as the reports revealed mixed results for July. However, a small impact from British macroeconomic data as well as the weakening US Dollar were not interfering the Sterling to extend gains by the mid-Friday session, where after post-data drop of 0.04% the British Pound rose to the highest level in five weeks to start trading in the 1.318-1.321 area.
The Office for National Statistics stated that the UK manufacturing output increased 0.5% over the month of July, showing the strongest gain this year. Coming along with weaker construction output, data suggested the UK economy to expand at a modest pace in the Q3.
British Consumer Price Index
The main event in this session is scheduled during the morning when the Office for National Statistics of the United Kingdom is to release the Consumer Price Index for July at 0830GMT. Likewise, the UK Producer Price Index and the Retail Price Index are to be published at the same time. The only fundamental event from the United States that should be mentioned is the Job Openings and Labour Summary (JOLTS) released by the US Bureau of Labor Statistics at 1400GMT.
GBP/USD returns near monthly R1
The GBP/USD currency pair was characterised by a lack of volatility on Monday. The Pound tried to surpass the monthly R1 at 1.3208, but failed to do so for the second consecutive time. Subsequently, it was pressured down to the 55-hoour SMA which managed to support the rate effectively and return it near the aforementioned monthly R1. Technical indicators suggest that this level should not be surpassed. Nevertheless, the UK CPI release scheduled at 0830GMT might introduce some changes to this assumption, especially if data turn our to be solid. By and large, the appreciation that was apparent on Tuesday morning should be followed by a decline in price, setting the 100-hour SMA as a possible bottom target for this session.
Hourly chart
GBP/USD remains near the monthly R1 for the third consecutive session. The Pound has managed to shoot up to this level once again on Tuesday morning, demonstrating that bulls have taken the upper hand. The next resistance is set by the weekly R1 at 1.3311; thus, no barriers are restricting the pair between the monthly and weekly R1s. Meanwhile, the lower end is guarded by the 38.2% Fibonacci retracement line at 1.3146.
Daily chart
Bullish sentiment deteriorates
SWFX market sentiment has remained at a relatively stable position on Tuesday, as the number of long positions is 57% (unchanged from Monday). Meanwhile, 70% of pending orders are to buy the Pound.
On the other hand, OANDA traders are increasingly bearish on the pair, as 60% of open positions are short (+2%). Traders at Saxo Bank are likewise bearish with 63% short positions (-2%).