- 53% of pending orders in the 100-pip range are to SELL the Pound
- 62% of traders are bearish on the pair (+5%)
- Daily low should be reached around 1.4270
- Upcoming data releases: British Average Earnings Index 3m/y, Claimant Count Change and Unemployment Rate; US Building Permits; US Housing Starts; US Capacity Utilisation Rate; US Industrial Production m/m; FOMC Members Williams, Quarles and Bostic to speak
The pair continued to push higher on Tuesday morning; however, this upward momentum should allay during the following hours.
The Greenback weakened against the Eurozone's single currency, following the US Retail Sales data release on Monday. The EUR/USD currency pair gained only three pips, or 0.02%, to continue going up afterwards.
The Census Bureau released two reports simultaneously, from which Retail Sales data came out better-than-expected, but Core Retail Sales came out in line with forecasts. However, data was more like positive, the US Dollar lost its strength, which can be explained with the fact, that Federal Reserve Bank of New York revealed lower-than-expected Empire State Manufacturing Index data, even though index above zero indicates positive result overall.
Various data releases scheduled for today
Tuesday's trading session will start with the British Average Earnings Index, Claimant Count Change and Unemployment Rate at 0830GMT. The following day is allocated solely to fundamentals from the United States.
The US Census Bureau is going to release the Building Permits and Housing Starts for the preceding month, while the Federal Reserve will publish the Capacity Utilisation Rate and Industrial Production for the same period at 1230GMT and 1315GMT, respectively.
Three speeches by FOMC members are likewise occurring today. The President of the Federal Bank of San Francisco John Williams is due to speak about monetary policy at a global symposium at 1315GMT and the President of the Federal Bank of Atlanta Raphael Bostic will discuss the economic outlook in a Bloomberg interview at 2140GMT. Meanwhile, The Federal Reserve Governor Randal Quarles is due to testify on supervision and regulation before the House Financial Services Committee at 1400GMT.
GBP/USD reaches new 2017/2018 high
The GBP/USD currency pair closed Monday's trading session with a solid 91-pip gain. The biggest surge occurred mid-day when the Pound dashed through 1.4313 - its highest position since the Brexit vote in June 2016—and reached the weekly R1 at 1.4335 later in the evening.As apparent on the chart, the pair has started to consolidate near this mark, indicating that bulls might need some time to regain their momentum. Being located in the overbought territory, technical indicators have already started to move lower. Thus, even if some upward movement is apparent during the first part of the day, the pair is unlikely to reach the weekly R2 and should remain below the 1.44 mark.
Meanwhile, significant support is set by the 55– and 100-hour SMAs and the monthly R1 near 1.4260.
Hourly chart
Following a test of the 55-hour SMA early in April, the Sterling accelerates substantially against the US Dollar. Technical indicators demonstrate that there is still some slight upside potential. Thus, the pair might still edge higher during the following session, setting the 1.44 area as a possible near-term target.
In case bears prevail this week, the pair should be pushed towards a trend-line at 1.41.
Daily Chart
The SWFX market sentiment has strengthened by five percentage points on Tuesday, as 62% of open positions are short. In addition, 51% of pending orders are to sell the Sterling (-2%).
OANDA traders remain bearish on the Pound with 62% of their open positions being short (unchanged from Monday). Saxo Bank is likewise bearish with 66% of its clients holding short positions (+1%).
Spreads (avg, pip) / Trading volume / Volatility