- 60% of pending orders in the 100-pip range are to SELL
- 54% of traders are bullish on the Pound (-1%)
- Important support lies circa 1.3180
- Upcoming events: US Building Permits, US Housing Starts
The Sterling appreciated against the US Dollar on the weak retail sales figures for the UK on Thursday. Following the release, the GBP/USD exchange rate increased 17 base points or 0.13% to hold very close to the 1.3200 level and then jump above 1.3230 on Friday morning.
Britain's retail sales marked their first yearly decrease since 2013 in October as shoppers struggled with rapidly-rising prices and sluggish pay growth. The ONS showed that retail sales fell 0.3% year-on-year along with a 0.3% monthly gain over the course of October. The downward trend is expected to be revised during the next year amid weaker inflationary pressures as well as firmer increase in wages, as underlying growth rate was improving.
US Building Permits
The first part of this session will be calm in terms of fundamentals. The only two sets of data that are to be released today are the US Building Permits and Housing Starts for the month of October at 1330GMT.
GBP/USD at crossroads of two channels
A release of better than expected information on the British retail sales supported active appreciation of the Pound and provided an impulse strong enough to break through the 1.3228 resistance level and reach an intersection of upper boundaries of a dominant descending and junior ascending channels.
As there are no significant macroeconomic data releases planned for today that could facilitate the further surge, the cable is expected to make a rebound and start the new trading week moving back to the 1.3200 mark. The only question remains strength of which pattern will prevail.
The majority of traders has bullish outlook on the Sterling. However, the aggregate market sentiment is 53% bearish. In this sense, there is a need to remember that currency pair is trading in a general uptrend.
Hourly chart
Upside risks continue to affect the Sterling for the fourth consecutive session. Strong upside momentum prevailed on Friday morning, as well, thus pushing the rate towards a resistance cluster formed by the monthly PP and the 55-day SMA near 1.3220.
Even though bulls had already managed to move the pair up to the weekly R1 in the morning, the 1.3240 area should hinder or even halt the Pound within the session. From the downside, the pair is supported by the weekly PP at 1.3160.
Daily chart
Bears strengthen their positions
The bullish SWFX market sentiment has slightly weakened on Friday, as it is currently standing at 54% (-1%). In addition, 53% of pending orders are to buy the Sterling (-5%).
OANDA traders are bullish in this session, as 52% of open positions are long (-1%). Meanwhile, Saxo Bank clients remain bearish on the pair, as 62% of their positions are short (+1%).