Pending home sales increased substantially and, thus, surprised many experts, who did not expect such a leap. In February, the Pending Home Sales Index spiked 5.5% and reached the highest level in almost a year and the second highest level in over a decade. Growth was partially attributable to a record-warm end of winter, which motivated people to start looking for a house more actively than usual. Another factor that boosted sales was households' concern over a possible rise of interest rates by the end of this year. However, the main reason behind increased sales was strong demand, which was driven by improving economic conditions in the US. Yet, many potential home-buyers faced the problem of supply shortages, which negatively impacted prices, especially in the lower- and mid-market price ranges.
Other data released on Wednesday revealed that US crude oil inventories rose 900,000 barrels last week, following the preceding week's gain of 5 million barrels. Meanwhile, analysts anticipated a climb of 1.2 million barrels during the reported week. Oil prices rose shortly after the release, with WTI jumping above $49 per barrel. Data suggests that the OPEC production deal cut has finally started bearing fruits.
US Final GDP is the main event today
GBP/USD risks falling under 1.24
The GBP/USD currency pair managed to avoid serious losses on Wednesday, as the weekly PP, the 55 and the 100-day SMAs provided sufficient support. The Cable remains on the back foot, but the immediate demand cluster could still keep the exchange rate above the 1.24 mark today. Technical studies in the daily timeframe support this outlook, but given the latest developments, more downside is expected. On the other hand, from the technical perspective there might soon be a relatively strong purchase signal, which implies the Pound could strengthen against the Buck and erase all this week's losses.
Daily chart
Hourly chart
Traders mostly bullish
There are 59% of traders holding long positions today (previously 57%). At the same time, the share of sell orders inched up from 55 to 56%.
A slightly less optimistic situation is observed elsewhere. For example, 52% of positions open at OANDA are currently long. This is more than the share of shorts (48%), but not sufficient to call the sentiment bullish, instead it is neutral. Meanwhile, sentiment at Saxo Bank is also quite close to equilibrium, with 53% of traders now being long and the other 47% being short the Sterling against the US Dollar.
Spreads (avg, pip) / Trading volume / Volatility
Traders still indecisive
By the end of the next three months traders expect the Cable to fall under the 1.22 major level, as 55% of survey participants believe so. While the current price is around 1.26, the average forecast for June 30 is 1.2204. The 1.14-1.16 range is now the most popular price interval, having 15% of the votes, while on the second place are the 1.16-1.18, the 1.18-1.20, the 1.26-1.28 and the 1.30-1.32 price ranges, with 13% of poll participants choosing each of them. Furthermore, the 1.12-1.14 and the 1.24-1.26 intervals was selected by 8% of voters.