- 54% of pending orders in a 100-pip range are to sell the pair
- 67% of traders are bullish on the Pound
- Significant support is located near the 1.2950 mark
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Upcoming Events: UK CPI y/y, UK PPI Input m/m, UK RPI y/y, US Retail Sales m/m, US Core Retail Sales m/m, US Empire State Manufacturing Index, US Import Prices m/m
Positive Britain's economic reports for June resulted in a solid jump in the GBP/USD exchange rate right after the data came in. Following the release, the Sterling rose versus the US Dollar by 16 base points to touch the 1.2981 level.
The Office for National Statistics reported that the country's manufacturing output grew at the same pace as previously, while industrial production advanced unexpectedly over the month of June. The survey's results suggested that the manufacturing growth is likely to gain momentum in the third quarter, while exports would grow at a faster-than-estimated pace. Moreover, experts revealed that the economic expansion is likely to hold up sufficient growth pace in the second half of 2017 rather than decelerate.
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Busy economic calendar
The economic calendar for this session is full of possible market shakers. First, the day will start with the UK releasing the Consumer, Producer and Retail Price Indices at 0830GMT, together with other minor UK data. Second, the United States is to publish data on Retail Sales, Core Retail Sales and Import Prices for the month of July and the Empire State Manufacturing Index at 1230GMT.
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GBP/USD returns near 1.2960
Despite forming a triple bottom, the Pound failed to surge against the US Dollar on Monday. It reached the 1.3020 area and fell back down to the aforementioned support. The morning session can be characterised by a lack of volatility. This situation, however, will change later when both the UK and the US is to release fundamental data. The failure to fall below 1.2960 four times suggests that this level, together with the weekly and monthly S1s, may halt the rate, thus setting it for a test of the 55– and 100-hour SMAs and the weekly PP circa 1.30.
Hourly chart
The Pound continues to approach the lower boundary of an intermediate-term ascending wedge. The pair is testing the weekly and monthly S1s which is likewise reinforced by the 55-day SMA at 1.2934. Downside risks may prevail in the nearest time in order for the Pound to reach the lower wedge boundary. However, it is yet unclear if this will occur in this session. By and large, fundamental data has a potential to influence the pair either direction.Daily chart
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Sentiment becomes neutral
The bullish sentiment has not changed on Tuesday, with 67% of open positions being long (-2%). Meanwhile, the number of pending orders is almost at equilibrium, currently standing at 51% to sell the Pound (-3%).
Meanwhile, traders at Saxo Bank are bearish on the pair, with 61% of traders holding short positions (-3%). The same bearish sentiment is shared by OANDA where 56% of open positions are likewise short (unchanged from Monday).
Spreads (avg, pip) / Trading volume / Volatility