- 54% of pending orders in the 100-pip range are to buy the pair
- 55% of traders are bearish on the Pound
- Important support lies near 1.3485
- Upcoming events: UK Retail Sales m/m, US Existing Home Sales, FOMC Economic Projections, FOMC Statement, Federal Funds Rate, FOMC Press Conference
The Commerce Department revealed that the US building permits rose to the strongest level in seven months over the course of August with the total number of 1.30M permits issued
. The property market was moving ahead before an expected transitory hit from Hurricanes Irma and Harvey. Though, the number of permits in damaged areas was not significantly weaker, housing could stay a drag on the US economy in the third quarter.
FOMC in focus
The focus of this trading session is undoubtedly the US Federal Open Market Committee which is to release some significant information at 1800GMT, namely its Economic Projections for inflation and economic growth of the US economy, its Statement and Federal Funds Rate. The press conference is scheduled for 1800GMT. However, the UK is still to release its Retail Sales for the month of August beforehand at 0830GMT.
GBP/USD forms minor symmetrical triangle
Unfortunately for the Pound, previous trading session signified the end of an upside momentum that guided movement of the pair over the last four days.
On hourly chart it is easy to note how the 55-hour SMA managed to neutralize multiple attempts to break to the top. However, from the opposite direction the fall of the rate was similarly constrained by the monthly R2 at 1.3485. In result of this consolidation the currency pair is now fluctuating in a minor symmetrical triangle whose breakout point in terms of time coincides with announcement of the Federal Funds Rate.
On the other hand, there is a need to take into account that the above pattern is likely to broken a little bit earlier due to reaction on release of data on the UK Retail Sales.
Hourly chart
Tuesday's trading session demonstrated the equal force of both bulls and bears, as the rate managed to close in a relatively small range between the monthly R2 and the 50.0% Fibonacci retracement. This morning session shows the same lack of volatility. This might be due to the fact that traders anticipate fundamentals from both the UK and the Fed.
The closest resistance is set by the upper wedge boundary near the 1.3580 mark, while the rate is supported by the aforementioned monthly R1, the 50.0% Fibo and the weekly PP circa 1.35.
Daily chart
Market sentiment more bearish
SWFX market sentiment has once again turned bullish, as the number of long positions on Tuesday is 55%. Meanwhile, 58% of pending orders are to buy the Pound.
On the other hand, OANDA traders are still bearish on the pair, as 60% of open positions are short (-3%). Traders at Saxo Bank are likewise bearish with 70% short positions (unchanged from Tuesday).