- 82% of pending orders in 100-pip range are to sell the pair
- 60% of traders are bullish on the Pound
- Gains could be capped near the 1.3080 mark
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Upcoming Events: US Preliminary Nonfarm Productivity q/q, US Preliminary Unit Labour Costs q/q, US Final Wholesale Inventories m/m, US 10-y Bond Action, UK RICS House Price Balance
The Sterling strived to offset post-NFP losses, as Monday's report revealed that the UK home prices rose more than anticipated in July. GDP/USD showed almost no reaction to the data, however, later on it posted a gradual fall to the 1.3040 mark, but then went back to the level seen before the release. Halifax reported that its House Price Index rose 0.4% month-over-month in July, surpassing expectations for a 0.3% increase.
However, experts suggested that the UK property market was relatively stagnant or cooling, as the yearly prices growth pace slowed to 2.1% in the reported period. Moreover, the demand for housing would weaken amid a slow wage growth and an ongoing shortage of available properties, which is set to boost house prices in the upcoming months.
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Preliminary US data in focus
Similarly to yesterday, most fundamentals in today's economic calendar are minor data releases from both the US and the UK, for instance, US Final Wholesale Inventories at 1400GMT, US 10-y Bond Action at 1701GMT and UK RICS House Price Balance at 2301GMT. However, the US Bureau of Labor Statistics is set to publish the quarterly preliminary reports on nonfarm productivity and unit labour costs at 1230GMT. These two events are considered more prominent, thus being able to shock the market unexpectedly.
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GBP/USD finds support near 1.2960
After breaching the senior channel down on Monday, the Pound managed to retrace from its upper boundary the following day. The rate found support at a support cluster formed by the weekly and monthly S1s circa 1.2950 and has since edged higher just to reach the 1.30 mark. The strong down-trend that guided the price last week has allayed, suggesting that the Pound may eventually appreciate against the US Dollar in this session. An immediate resistance is provided by the 55-hour SMA at 1.3025, while a more distant upside target for today is an intersection of the 100-hour SMA and the monthly PP circa 1.3000. In terms of a downside limit, the pair is not expected to go below the monthly and weekly S1s.
Hourly chart
Following four-day depreciation against the Greenback, the Pound seems to be regaining some ground in this session. The rate is bounded between the monthly S1 and the 20-day SMA at 1.2944 and 1.3069, respectively, thus leaving enough space to make a move both directions. Intraday signals should be observed in order to make more accurate prediction about the pair's possible direction.Daily chart
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Sentiment changes in favour of bears
No changes have been made to the SWFX market sentiment, as 59% of traders are still holding long positions. Meanwhile, 55% of pending orders are to sell the Pound (+2%).
In the meantime, traders at Saxo Bank remain bearish on the pair, with 62% of traders holding short positions (-3%). The same bearish sentiment is shared by OANDA where 61% of open positions are likewise short (+1%).
Spreads (avg, pip) / Trading volume / Volatility