- 55% of pending orders in the 100-pip range are to buy
- 59% of traders are bearish on the Pound
- Important resistance lies near 1.3485
- Upcoming events: UK Current Account, UK Final GDP q/q, UK Net Lending to Individuals m/m, US Core CPE Price Index m/m, US Personal Spending m/m, Chicago PMI, US Revised UoM Consumer Confidence, MCP Member Broadbent, BOE Governor Carney and FOMC Member Harker to speak
The Commerce Department said that the US economic growth in the second quarter was the quickest in more than two years, with a 3.1% annual increase in the reported period.
However, growth momentum is expected to be slowed owing to the impact of Hurricanes Irma and Harvey. Analysts suggested anticipated weakness would be softened by rising inventory investment in the Q3.
BOE Governor Carney to speak mid-session
The first half of the day will be rather due to fundamental releases and events from both the UK and the US. First of all, the day will start with data on the British Current Account for the second quarter of 2017 at 0830GMT. The UK Final GDP for Q2 and the monthly Net Lending, among other releases of minor importance, are published at the same time. Furthermore, the next two sets of data, namely, the US Core CPE Price Index m/m and US Personal Spending m/m, as well as the Chicago PMI and the Revised Consumer Sentiment by the University of Michigan, are to be released at 1230GMT, 1345GMT and 1400GMT, respectively.
Meanwhile, this session also includes three speeches. First, the Deputy Governor of the Bank of England Ben Broadbent is to participate in a panel discussion titled "The future of central bank independence" in London. The exact time, however, is tentative. Furthermore, the BOE Governor Mark Carney is to deliver closing remarks at the same conference. Finally, the President of the Federal Reserve Bank of Philadelphia Patrick Harker is set to speak about the economic outlook and financial technology at 1500GMT.
GBP/USD breaks from falling wedge north
In accordance with trade patterns theory, the currency pair made breakout from a falling wedge to the top. The breaking point matched with two speeches delivered by Governor Carney and Theresa May at the at the Bank of England's conference.
Unfortunately, the upside momentum was not particularly strong, as subsequently the exchange rate failed to bypass even the 100-hour SMA near 1.3451. This fact call into question the ability of bulls to support the further surge and push the pair through a combined support set up by the 200-hour SMA together with the monthly R2 at 1.3485.
In addition to that, later this day Governor Carney will deliver another speech, which might lead to bearish sentiment once again. After all, the southern side currently is remaining a barrier-free area.
Hourly chart
The Pound has been trading at the same level for the third consecutive session. Upside risks dominated the market on Thursday, thus pushing the rate above the weekly S1 and towards the monthly R2. Nevertheless, bears have once again taken the upper hand and are pushing the rate back in the 1.3413/1.3328 area. The weekly S2 at 1.3329 is supported by the 20-day SMA.
Daily chart
Market sentiment is strongly bearish
The bearish sentiment dominates the market on Friday, as the number of short positions is 59% (unchanged from Thursday). Meanwhile, 57% of pending orders are to buy the Pound (-3%).
OANDA traders remain bearish on the Pound, as 63% of open positions are short (-1%). Traders at Saxo Bank are increasingly bearish with 68% short positions (+3%).