- The share of sell orders is unchanged at 53%
- 53% of all open positions are long
- The main short-term resistance lies at 1.4611
- Support is at 1.4481, namely the weekly PP
- 59% of traders reckon GBP/USD will be at 1.46 or lower in three months
- Upcoming events: UK CPI and Core CPI, UK PPI Input and Output, UK RPI, UK HPI, US Empire State Manufacturing Index, US NAHB Housing Market Index
On Friday and over the weekend the British currency outperformed most major peers. The top performer was the GBP/NZD, climbing 1.49% higher, while the Sterling also advanced against the Yen, the Euro and the Swissie, edging higher 0.85%, 0.77% and 0.63% higher. Against both the Kiwi and the Aussie, the British Pound inched only 0.18% higher, but the decline of 0.37% was registered versus the Canadian Dollar.
US retail sales climbed slightly in January, rising for the third consecutive month, evidence that Americans kept shopping despite steep declines in equity prices. According to the Commerce Department, retail sales increased a seasonally adjusted 0.2% last month, the same as in December. Excluding the effect of falling gas prices, sales increased 0.4%. Americans boosted their purchases in January of autos, home supplies and groceries, and spent more online. Greater job security, rising wage growth and falling gasoline prices may be encouraging more consumers to loosen their purse strings after a fourth-quarter slowdown. A pickup in household purchases, which makes up the lion's share of the economy, would help the US prevent the negative effects of a strengthening US Dollar, weak foreign demand and tumultuous financial markets.
Continued improvement in the labour market is keeping Americans spending. US employers added 151,000 to payrolls in January after expanding headcounts by 262,000 the in the prior month. In addition to that, average hourly earnings increased 2.5% in the 12 months ended January following a 2.7% gain in December that was the most since 2009. Consumers are the engine that has been powering the US economy for the past two years as they account for roughly 70% of GDP.
A quiet Monday, as usual
Even though there are no significant economic data releases on Monday, there is a rather large number on Tuesday. Concerning the UK, the most important even will be the Consumer Price Index, which is released by the National Statistics and is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. The purchase power of GBP is dragged down by inflation. The CPI is a key indicator to measure inflation and changes in purchasing trends. Concerning the US, the Empire State Manufacturing Survey is due. It is conducted by the Federal Reserve Bank of New York gauges business conditions for New York manufacturers. It is a leading indicator of economic health, a strong reading of which could bring back confidence in global economic growth.
GBP/USD attempts to remain elevated above 1.45
Last Friday, the Sterling was unable to significantly outperform the US Dollar and failed to completely negate the preceding day's losses. Nonetheless, the GBP/USD currency pair is managing to maintain trade above the 1.45 major level, with the weekly PP at 1.4481 providing immediate support. In case the bears take over, a stronger cluster rests around 1.4380, where the up-trend coincides with the monthly PP. However, according to technical indicators, the Cable is likely to edge higher, but with the closest resistance in face of the weekly R1 at 1.4611 being out of reach.
Daily chart
The Cable's bullish momentum appears to be prevailing, as the one-week trend-line failed to contain the pair's volatility on Friday and is also giving in today. However, in case the 200hour SMA fails to provide any support, there could still be a decline towards the 1.44 level and, eventually, towards the four-week up-trend.
Hourly chart
Three brokers - three sentiments
Market sentiment inched closer to equilibrium, as 53% of all open positions are now long, compared to 56% on Friday
The clients of the other two brokers seem to have different opinions on GBP/USD. OANDA traders are bullish on the UK currency. Right now, 61% of them are long, compared to 63% on Friday. At the same time, Saxo Bank traders are net short the currency pair: 60% of open positions are short and 40% are long.
Spreads (avg, pip) / Trading volume / Volatility
Majority sees GBP/USD below 1.46 in three months
The majority of traders (59%) believe the British currency is to cost 1.46 or less dollars after a three-month period. The most popular price interval was selected by 14% of the voters, namely the 1.40-1.42 one, while the second most popular choice implies the Pound is to cost either between 1.46 and 1.48 dollars or between 1.48 and 1.50 dollars in three months, both chosen by 12% of the surveyed. At the same time, the mean forecast for May 15 is 1.4379.