- 59% of pending orders in the 100-pip range are to SELL the Sterling
- SWFX market sentiment is 63% bullish (-2%)
- Upcoming fundamentals: British Retail Sales m/m, US Unemployment Claims and Existing Home Sales, BOE Governor Carney and FOMC Members Dudley and Bostic to speak
Strong resistance cluster that could restrict the Pound's appreciation is located at 1.3415.
The British Pound weakened against the Greenback, following the UK CPI data release on Wednesday. The GBP/USD currency pair lost 39 pips, or 0.29%, to continue fluctuating in the 1.3361 area.
The Office for National Statistics simultaneously released six data sets, where Consumer Price Index data came out lower-than-expected of 2.4%, compared to 2.5% in the previous period.
Retail Price Index and Producer Price Index Output came out in line with economists' expectations. However, Core Consumer Price Index, House Price Index and Producer Price Index Input came out lower-than-expected, which intensified the British Pound to weaken even more.
British Retail Sales
The most important fundamental that could shake the pair in this session is the British Retail Sales for April to be published at 0830GMT. The BOE Governor Mark Carney is due to speak at the Society of Professional Economists' annual dinner at 1700GMT.
Some fundamental events of intermediate importance are likewise published today, such as the US weekly Unemployment Claims and Existing Home Sales at 1230GMT and 1400GMT, respectively. Meanwhile, the President of the Federal Reserve Bank of New York William Dudley is due to speak on reference rate reform at the BOE's Markets Forum at 0815GMT, while his Atlanta counterpart Raphael Bostic will deliver opening remarks at a research event on technology-enabled economic disruptions at 1435GMT.
GBP/USD recovers from plunge
The first part of Wednesday's trading session for GBP/USD was spent under the bearish pressure. Additional downside momentum was provided by a sluggish UK CPI data release at early in the session.As a result, the Sterling dashed through its previous 2018 low, the prevailing three-week channel and the monthly S1 prior to reversing back to the upside near 1.33. The rate recovered during the second part of the day, thus being located at the breached channel early on Thursday.
Following such a strong daily fall, the Sterling should try appreciating today; however, it is likely to find strong resistance in the 1.3400/20 area. In case this level is surpassed, the next target is 1.3460. Meanwhile, downside potential is apparent until the weekly S3 at 1.3250.
Hourly chart
Following several days of fluctuating near the 200-day SMA circa 1.3530, the Sterling eventually breached this line and fell down to the 1.3415 mark on Monday morning.
It is expected that a medium-term surge could start this week. In order to confirm this scenario, the aforementioned long-term SMA needs to be surpassed.
Daily Chart
The bullish SWFX market sentiment is strongly bullish with 63% of open positions being long today (-2%). Meanwhile, 55% of pending orders remain to sell the Pound (+1%).
The market sentiment of OANDA traders is strongly bullish, as 62% of them are holding long positions (+2%). Saxo Bank clients are likewise bullish with 55% long positions (-5%).
Spreads (avg, pip) / Trading volume / Volatility