- 57% of all pending orders are to buy the Pound
- 58% of all open positions are long
- Mark Carney caused the recent jump
- Significant support rests circa 1.2740
-
Upcoming Events: US Final GDP; US Unemployment Claims
The Bank of England Governor Mark Carney said on Wednesday that the Monetary Policy Committee might need to start raising interest rates soon, adding that the BoE's interest-rate decision would be discussed in the next few months. Carney's unexpectedly hawkish comments pushed the Sterling to its new session highs. In the meantime, the GBP/USD hit its highest level since the June 8 election. Earlier, Mark Carney stated that it was not yet the time to step on the path of interest rate hikes despite surging inflation. Furthermore, on Wednesday, the Governor said that at the June 15 meeting it was necessary to leave the Bank's interest rates unchanged due to "the mixed signals on consumer spending and business investment".
On June 15, five out of eight policymakers voted to keep monetary policy and rates on hold. According to the BoE, inflation is set to rise above 3% in the upcoming months, well above the Bank's 2% target. Carney stated that in order to begin raising rates he would focus on household consumption and the economy's reaction to the country's withdrawal from the European Union.
Watch More: Dukascopy TV
Attention shifts to US
As the speeches have shook the markets on Wednesday, more or less a calmer situation is to be expected on Thursday. The US Final GDP and the US Unemployment Claims will be published at 12:30 GMT. The data release will be covered by the Dukascopy research team in real time on the bank's webinar platform. In addition to that, another data release is set to occur, which might influence the GBP/USD pair. The UK Current Account and Final GDP will be published at 8:30 GMT.
Read More: Fundamental Analysis
GBP/USD strengthened by Mark Carney
On the chart for the GBP/USD currency pair a surprise jump can be observed. The surge of the Pound was caused by comments made by the Bank of England Governor Mark Carney. The jump propelled the currency exchange rate through the resistance put up by the monthly pivot point at the 1.2903 level. Due to that reason it can be expected that the currency pair will continue the surge. However, the difference in the case of GBP/USD pair is that Mark Carney's comments have still not been analysed as much as those of Mario Draghi in regards to the Euro. The results of this factor can be observed on the charts. The GBP/USD pair, since the jump and reaching above the 1.2950 level, has remained rather flat near the 1.2930 mark.
Hourly chart
On the daily chart some minor details are relevant. The upper Bollinger band of the daily chart is located at the 1.3020 mark. It is bending upwards, which means that the band is set to strengthen the resistance of the weekly R1 at the 1.3036 level.Daily chart
Read More: Technical Analysis/
Bearish sentiment prevails
SWFX traders have become increasingly bullish on the pair, as 58% of all open positions are long (60% on Wednesday). Meanwhile, 57% of set up orders are to buy the Pound.
On the contrary, traders at Saxo Bank are bearish on the pair, with 64% of traders holding short positions (61% previously). In addition, OANDA clients are likewise bearish with 60% of open positions being short.
Spreads (avg, pip) / Trading volume / Volatility
Traders slightly bullish
© Dukascopy Bank SAThe majority of traders believe that the Cable is to fall below the 1.28 mark three months from now, as 57% (+4) of survey participants share this belief. The current spot price is around 1.2990, while the average forecast for September 29 is 1.2771 (1.278 on Wednesday). The 1.24-1.26 range still remains the most popular price interval, having 204 of the votes.