- 74% of pending orders in a 100-pip range are to buy the pair
- 67% of traders are bullish on the Pound
- Bank Holiday in the US
- Upcoming Events: UK Construction PMI
The Sterling appreciated against the US Dollar, as the UK manufacturing sector reported a stronger-than-expected growth in August. GBP/USD rose to the 1.2930 mark to sustain the appreciation up until the US economic reports.
The weakness in the British Pound resulted in a boost of new orders coming from the US and Europe, which supported expansion of the UK manufacturing sector. Markit reported that the country's Manufacturing PMI rose to the 56.9 mark in August, though remained below the 57.4 figure registered in the Euro zone. However, the sector is still expected to maintain positive growth in the near term given support from a solid recovery in the EZ and higher export competitiveness.
Only event – UK Construction PMI
The only fundamental event in today's trading session is the British Construction PMI at 0830GMT, as banks in the United States are closed due to Labour Day.
GBP/USD moves in limbo
In result of release of data on the UK Manufacturing PMI, the Pound gained a short upside moment that helped it to leave a short-term descending channel to the top. However, a subsequent publication of information on the US labour market neutralized the surge and forced the pair to move horizontally. As a result, today it is squeezed between two barriers. The upper side protected by a the monthly PP at 1.2991 and the upper boundary of a dominant ascending channel, while the southern side is secured by a combination of the updated weekly PP 1.2934 and the 55- and 100-hour SMAs. Both of them represent too strong obstacles to be easily crossed. So, today the pair is expected to continue to fluctuate between them.
Hourly chart
As apparent on the daily chart, the Pound has reached the lower boundary of a long-term ascending wedge. In case it finds support at the 55-hour SMA at 1.2950 and manages to trade higher during the following trading sessions, a new wave upwards might be confirmed, thus required an alteration of the aforementioned wedge line. Apart from the 55-hour SMA, the pair is stranded between the weekly and monthly PPs at 1.2991 and 1.2934, accordingly.
Daily chart
Market sentiment slightly bullish
The bullish GBP/USD sentiment dominates the market, as 67% of open positions are long (-1%). Meanwhile, the number of pending orders to buy the Pound is 60% (+9%).
OANDA traders have turned slightly bullish on the pair, as the number of open positions is 53% (+3%). Meanwhile, traders at Saxo Bank remain increasingly bearish with 63% short positions (+3%).