- 57% of pending orders in the 100-pip range are to SELL the Pound
- SWFX market sentiment is 65% bullish (-2%)
- Upcoming fundamental events: US Existing Home Sales, MPC Member Broadbent to speak
The Pound is likely to be bound by several SMAs today.
The British pound weakened against the Greenback, following the UK CPI data release. The GBP/USD currency pair lost 46 pips, or 0.36%, to continue fluctuating in the 1.3039 area.
The Office for National Statistics released CPI data that came lower-than-expected of 2.4%, compare to forecasted 2.6% and stayed unchanged from the previous period.
A Senior Economist from Hargreaves Lansdown, Ben Brettell said: "Markets had been pricing in around an 80% chance the Bank would lift borrowing costs in August, but today's inflation data combined with yesterday's lacklustre wage growth figures could force policymakers into a rethink."
Quiet day
No important data releases are scheduled for today. The US National Association of Realtors is set to publish the monthly home sales at 1400GMT. However, this release has generally muted effect on the market.
Meanwhile, the BOE Deputy Governor Ben Braodbent is due to speak about the history and future of quantitative easing at the Society of Professional Economists at 1700GMT.
GBP/USD allays after surge
The combined resistance of the 55-hour SMA and the monthly S1 restricted the Pound from moving above 1.3050 early on Friday. The necessary bullish sentiment was provided during the second part of the day caused by comments from the President Donald Trump on the strong US Dollar.This allowed the pair to surge 1.10%, being stopped solely early on Monday when it hit the 200-hour and 55- period (4H) SMAs at 1.3155. The pair being unable to move past this cluster might point either to a decline or a movement sideways in this session. Technical indicators being located in the overbought territory support the bearish scenario.
In case of a fall, the Sterling would be sent back to the 55– and 100-hour SMAs at 1.3050. The monthly S1 is likewise located nearby.
Hourly chart
By reviewing the daily chart of the GBP/USD pair, it was discovered that there exists a descending channel pattern that has been in action since the middle of April. The recent rebound managed to break this pattern.
Thus, it is assumed that there is a larger dominant pattern lacking from the picture, as the already broken pattern has to be a junior representation of a larger price movement.
Daily Chart
However, the general sentiment is still strongly bullish. Some even expect to open more long positions, if the currency rate reaches certain criteria, such as a breakout from resistance on the daily chart.
The market sentiment of OANDA is 68% bullish on Monday (-1%). Saxo Bank clients share the same bullish sentiment with 56% of positions being long today (-5%).
Spreads (avg, pip) / Trading volume / Volatility