- 54% of pending orders in the 100-pip range are to SELL the Sterling
- SWFX market sentiment is 59% bullish (-7%)
- No significant data releases today
Reversal for GBP/USD is expected during the second part of the day.
The British Pound strengthened against the Greenback, following UK Construction PMI data release on Monday. The GBP/USD currency pair gained only three pips, or 0.02%, to continue going up afterwards.
The Markit released Construction Purchasing Managers' Index data that came out a little bit better-than-expected, however stayed unchanged from the previous period of 52.5.
"Higher prices for fuel, raw material shortages, higher labor costs combined with slow delivery times were further obstacles to growth as firms nervously assessed their workforce for much-needed talent and sub-contractors could name their price," said Tim Moore, Senior Economist at IHS Markit and author of the Markit/CIPS Construction PMI.
Calm day
This trading session does not include any important data releases. Two speeches of intermediate importance are to occur today, namely, the External BOE MPC Members Silvana Tenreyro and Ian McCafferty are due to speak at 1040GMT and 1600GMT, respectively.
GBP/USD tests weekly R1
Strong upside risks prevailed on Tuesday, thus sending the Sterling 96 pips higher against the US Dollar. A notable hourly boost of 0.39% was provided by solid British Services PMI released early in the session. The pair subsequently found resistance at the 55-hour SMA and resumed its movement upwards, thus being located at the weekly R1 early today.As apparent on the 4H chart, the Pound has surpassed the 100-period SMA which might provide additional support to the rate. Technical indicators show that some upside potential should be realised within the following trading hours, setting the weekly R2 at 1.3465 as a probable northern target.
The overall market sentiment for today remains bearish, with the Sterling approaching the 200-hour SMA and the weekly PP circa 1.3320.
Hourly chart
The Sterling has plunged 7.28% against the US Dollar since mid-April. Despite lingering near the 200-day SMA for a couple of days, downside risks prevailed and pushed the rate as low as the 1.3245 last week.
As apparent on the chart, the Pound has started to recover from its six-month low. This appreciation is expected to continue during the following two weeks, as well. The nearest significant resistance is the 61.80% Fibonacci retracement and the 200-day SMA near 1.36.
Daily Chart
The bullish SWFX market sentiment has weakened by 7 percentage points to 59% of open positions being long today. Likewise, 51% of pending orders are to buy the Pound (-1%).
The market sentiment of OANDA traders is strongly bullish, as 72% of them are holding long positions. Saxo Bank clients are likewise bullish with 59% long positions (-11%).
Spreads (avg, pip) / Trading volume / Volatility