- 53% of pending orders in the 100-pip range are to BUY the Sterling
- SWFX market sentiment is 64% bullish
- Upcoming fundamental events: UK Average Earnings Index 3m/y, UK Claimant Count Change, UK Unemployment Rate, US (Core) Retail Sales m/m, Empire State Manufacturing Index, FOMC Member Williams to speak
The pair's movement today is dependent on its ability to breach the strong resistance cluster at 1.3555.
The British Pound weakened against the Greenback, following the UK Official Bank Rate data release on Thursday. The GBP/USD currency pair lost 76 pips, or 0.56%, to continue going down to the 1.3478 level.
The Bank of England released four datasets simultaneously from which Official Bank Rate was left unchanged of 0.5% for the fifth time straight, and MPC Official Bank Rate Votes also stayed in the same proportions as from the last time of 2-0-7.
The Bank of England also released BOE Inflation Report and Monetary Policy Summary, but these data releases most probably were traded by algorithms, that are capable of reading the text and understand its context.
Attention towards both the UK and the US
This trading session is full of fundamentals from both the UK and the US. The day will be opened with the British Average Earnings Index and the Unemployment rate during March at 0930GMT. The British Claimant Count Change for April is likewise published at the same time.
The US Census Bureau is set to release the (Core) Retail Sales for the previous month together with the Empire State Manufacturing Index at 1230GMT. The President of the Federal Bank of San Francisco John Williams is due to speak at the Economic Club of Minnesota May Luncheon at 1645GMT.
GBP/USD breaches strong support
GBP/USD continued to strengthen for the third consecutive session on Monday. This upward movement allowed the pair to reach the upper boundary of a medium-term channel at 1.36. After testing this psychological level, the pair was pressured back down to the 55-, 100– and 200-hour SMAs at 1.35550.This strong support cluster was breached during this Asian session—a move which might actually point to further decline in this session. Daily technical indicators likewise support this scenario.
From technical point of view, this bearish sentiment should result in a test of the bottom channel line circa 1.34. However, it is unlikely that the pair falls this low, as technical indicators on the 4H and 1D time-frames favour a soon recovery. The pair is expected to remain in the 1.3450/1.3650 territory today.
Hourly chart
Strong downside risks have been pushing the GBP/USD exchange rate considerably lower for the third consecutive week. As a result, the pair reached the 200-day SMA near 1.3530 last week and has since remained near this line.
Technical indicators on the daily time-frame are located in the overbought territory. Thus, this moving average might mark a reversal point from which the Pound should move towards the 1.40 mark during the following weeks.
Daily Chart
The bullish SWFX market sentiment has remained unchanged with 64% of open positions being long today. Meanwhile, 57% of pending orders remain to sell the Pound (+3%).
The market sentiment of OANDA traders is strongly bullish, as 64% of them are holding long positions (-1%). Saxo Bank clients share the same sentiment with 57% long positions (+1%).
Spreads (avg, pip) / Trading volume / Volatility