- 64% of pending orders in a 100-pip range are to sell the pair
- 65% of traders are bullish on the Pound
- Significant resistance is located near the 1.2950 mark
- Upcoming Events: Preliminary UoM Consumer Sentiment
After a full review of the technical situation on the GBP/USD pair, notable facts have been revealed. The most notable factor is that the pair is located at a significant crossroad, and in the upcoming trading sessions the pair will reveal its medium term direction.
The Sterling gained 14 base points against the US Dollar, as the UK Retail Sales report showed slightly better-than-expected data. The GBP/USD currency pair rose 0.11% to be seen trading near the 1.2901 mark just for a while and then retreated to the previous level. However, on Friday morning the Pound was strong enough to repeat the post-release gains.
The Office for National Statistics revealed that Britain's retail sales surged 0.3% month-over-month in July, above expectations for a 0.2% rise, though the figure was weaker than a 0.6% registered in June. Higher food sales managed to offset a decrease in spending on other goods. Moreover, the UK retail sales are expected to show modest expansion this year, if real wage growth keeps falling behind inflation.
One minor US data release
This Friday will be a quiet day for swing traders, as there are no notable data sets scheduled to be released. However, there is one data release, which could cause fluctuations in one pair. Namely, the USD/CAD might increase volatility due to the release of the Canadian CPI at 12:30 GMT. The release will be covered by the Dukascopy Research team on the bank's live webinar platform.
GBP/USD bounces off long term support
A review of the situation on the GBP/USD pair has been done. As a result of that, various new pieces of information have been discovered.
First of all, the recent decline of the pair was occuring in a medium term channel pattern, which guided the pair in its fall after encountering a dominant pattern's resistance. However, on Friday it was revealed that there was another channel, whose support line has kept the rate from falling during this week. Moreover, a rebound has occured against the line.
Due to that reason the rate should continue the surge. Although, on Friday it still has to pass the 100-hour SMA at 1.29.
Hourly chart
By examining the daily chart, it can be noted that the support line, which is keeping the pair from falling, is being strengthened. It is strengthened by the 100-day SMA, which on Friday morning was located at the 1.2874 mark. Moreover, the chart reveals that the 55-day simple moving average is located at the 1.2933 level.
Daily chart
Sentiment remains neutral
The bullish sentiment has decreased slightly on Friday, with 65% of open positions being long. Meanwhile, the dominant number of pending orders remains bearish, currently standing at 64% to sell the Pound.
It can be observed that OANDA traders are almost perfectly neutral, as 50.23% of open positions are short. Meanwhile, traders at Saxo Bank are bearish on the pair, with 52% of traders holding short positions.