- 57% of pending orders in the 100-pip range are to BUY
- 52% of traders are to sell the Pound (+1%)
- Rate faces resistance support circa 1.3480
- Upcoming events: UK Services PMI, US Trade Balance, US ISM Non-Manufacturing PMI
The British Pound was slightly higher against the US Dollar on the release showing stronger activity in the country's construction sector. The GBP/ USD added 8 base points to keep appreciating up to the 1.3500 level, though the pair was hit strongly as the BBC said not to anticipate deal to be reached from Brexit negotiations on Monday.
Housebuilding in the UK stimulated activity in the country's construction industry in November, compensating weakness in other parts of mostly downbeat sector. The IHS Markit/CIPS said that the Britain's Construction PMI reached the highest level in five months of 53.1 in the reported month, entirely driven by the residential projects, while civil and commercial engineering activity kept contracting.
UK Construction PMI
This trading session includes three sets of fundamentals. The day will start with the British Services PMI for November at 0930GMT.
Meanwhile, the US will publish its Trade Balance for October at 1330GMT and the ISM Non-Manufacturing PMI for the previous month at 1500GMT.
GBP/USD jumps up and down from political news
In general, previous trading session the currency rate spent moving downwards, as expected. Apart from rebound from the two month maximum at 1.3550, the drop was driven by anxiety over affirming vote on tax bill as well as new report that no agreement on Brexit has been reached yet.
From technical point of view, today the pair is squeezed between the 50% Fibonacci retracement level, the 55- and 100-hour SMAs from the top and the weekly PP plus the 200-hour SMAs from the bottom. These boundaries point out of further correction of the cable.
Theoretically, one of the scheduled data releases for today might stimulate the rate to make a breakout. However, this scenario seems unlikely, as markets are mainly focused on political news.
Hourly chart
The 50.0% Fibo at 1.3485 proved to be an unbreakable resistance for the GBP/USD exchange rate on Monday. As a result, the pair reversed to the downside early today and tried to reach the weekly PP at 1.3416. It is likely that is level does not hold, thus giving bears enough momentum to push the Pound even lower down to the monthly PP.
The following two sessions might mark the prevalence of the bearish sentiment that would allow the pair to make a retracement from the breached long-term channel circa 1.3350.
Market sentiment largely bearish
The SWFX market sentiment remains bearish, with 52% of open positions being short this Tuesday (+1%). Meanwhile, 56% of pending orders are to buy the Pound (-4%).
The market sentiment of OANDA traders is likewise bearish, as 56% of open positions are short for the second consecutive session. Saxo Bank clients share the same sentiment with 64% short positions (-3%).