- 55% of pending orders in the 100-pip range are to buy the pair
- 51% of traders are bullish on the Pound
- Important support lies near 1.3485
- Upcoming events: BOE Governor Carney speaks
The Commerce Department reported that the US retail sales dropped unexpectedly 0.2% over the month of August, missing expectations for a 0.3% increase.
The negative changes were mainly due to depressed purchases of motor vehicles likely after Hurricane Harvey, which could cause a further moderation in consumer spending in the Q3. However, a rise in purchases at restaurants and furniture outlets suggested the demand is set to be supported by a healthy labour market.
Bank of England Governor to speak at 1500GMT
Monday is characterised by a lack of significant fundamental events, except for the BoE Governor Mark Carney's speech at the Central Banking Lecture at 1500GMT. Meanwhile, some minor data releases from the US are likewise published in this session, such as the Housing Market Index by the National Association of Home Builders at 1400GMT and Long-Term Purchases by the Treasury International Capital at 2000GMT.
GBP/USD advances by another 150 points
As it was expected, the Pound continued to appreciate against the US Dollar, following a speech delivered by the External BOE MPC Member Gertjan Vlieghe on Friday. At the moment, the currency rate is moving horizontally in a limbo between the monthly R3 at 1.3701 from the top and the monthly R2 at 1.3485 from the bottom. However, it should be noted that space between the current market price and the above two barriers amounts approximately to 100 pips in both directions. Most probably, the pair is going to continue to move horizontally until the moment when Governor Carney will start answering questions at the Central Banking Lecture hosted by the IMF at 15:00 GMT. Taking into account previous market reaction on similar two events last week, another sharp surge is likely to follow.
Hourly chart
Bulls succeeded at pushing the Pound past the monthly R2 and the 50% Fibonacci retracement on Friday, thus resulting in 193-pip surge in one day. Daily technical indicators are currently located at historic highs which suggest that the expected reversal should occur in this session. As a result, the rate might be pressured downwards until the upper boundary of a long-term wedge circa 1.34 is reached.
Daily chart
Market sentiment more bearish
Bulls have managed to overcome the balanced market sentiment which was apparent on Friday, as the number of long positions has now become 51% (+1%). In addition, 62% of pending orders are to buy the Pound.
On the other hand, OANDA traders are increasingly bearish on the pair, as 65% of open positions are short (+1%). Traders at Saxo Bank are likewise bearish with 67% short positions (-2%).