- 63% of pending orders in the 100-pip range are to BUY the Pound
- SWFX market sentiment is 65% bullish
- Empty economic calendar
A breakout from the 100-hour SMA should be followed by a further fall.
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.
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 breaches minor trend-line
The Sterling remained stable against its American counterpart on Tuesday morning, being stranded between the weekly PP and the 200-hour SMA. The latter, likewise strengthened by the 55-period (4H) SMA, proved to be stronger, thus sending the pair down to the 55-period moving average.A short-term trend-line was breached to the downside along the way. This suggests that the bearish momentum might continue dominating the pair in this session, as well. The same signals are given by technical indicators which are generally tended south.
This scenario would mean a breakout of the 100-hour SMA at 1.3075 and a fall down to the monthly S1 near 1.30. Even if this decline is not significant, bullish gains are not likely to exceed the 55-period SMA at 1.3150.
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
The general sentiment remains 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 64% bullish on Tuesday (-4%). Saxo Bank clients share the same bullish sentiment with 57% of positions being long today (+1%).
Spreads (avg, pip) / Trading volume / Volatility