- 56% of pending orders in the 100-pip range are to BUY
- 62% of traders are bullish on the Pound (-1%)
- Significant resistance is located circa 1.3230
- Upcoming events: US JOLTS Job Openings, FOMC Meeting Minutes
The GBP/USD currency pair kept going upwards in response to Tuesday's report pointing to an advance in the UK manufacturing production. The Sterling extended gains against the US Dollar with a modest increase of 10 pips to appreciate further in the 1.3220 area.
Office for National Statistics report indicated that the Britain's manufacturing output rose 0.4% in the month of August, despite expectations for a weaker growth pace of 0.2%. The set of better-than-anticipated reports supported bullish sentiment, allowing the British Pound to get stronger footing. Overall, upbeat figures increased likelihood of the Bank of England's interest rate hike at the next monetary policy meeting in November.
FOMC Meeting Minutes at 1800GMT
Traders should take into account two events that are scheduled for August 11. First, the US Bureau of Labor Statistics will publish its Job Openings and Labor Turnover Summary at 1400GMT. Second, the Federal Open Market Committee is to release the minutes of its most recent meeting at 1800GMT.
GBP/USD fluctuates near 1.32
Due to release of better than expected data on the UK manufacturing production, the pair continued to climb to the top and even managed to bypass the 1.32 mark. However, then the surge was neutralized by the 200-hour SMA, which forced the rate to start moving in the opposite direction.
To certain extent, this turnaround was related to anticipation of the Fed Meeting Minutes, which is expected to show a hawkish stance on interest rate hike in December. Before this event, the currency rate is unlikely to make major advances in southern direction, as it is protected by a bunch of technical indicators, such as the weekly PP, the 55- and 100-hour SMAs as well as the 38.2% Fibonacci retracement level. But then traders' reaction might push the pair to a zone near the 1.3110 mark.
Hourly chart
The pair closing in the green area on Tuesday confirmed a short-term correction north. The market sentiment early on Wednesday, however, was demonstrating a change in the strong upside momentum to a more balance position. This might suggest that the pair could edge lower in the remaining trading week.
The nearest resistance is the relatively distant weekly R1 and the monthly PP circa 1.3320. Conversely, the pair is supported by the weekly PP and the 55-day SMA at 1.3167 and 1.3139, respectively.
Daily chart
Bullish market sentiment slightly weakens
SWFX market sentiment is bullish on Wednesday, as the number of long positions is 62% (-1%). In addition, 53% of pending orders are to buy the Pound (unchanged from Tuesday).
Market sentiment of OANDA traders stands at perfect equilibrium on Wednesday, as 50% of open positions are both long and short (-3%). Meanwhile, traders at Saxo Bank are still bearish with 56% short positions (-1%).