- 61% of pending orders in the 100-pip range are to BUY
- 62% of traders are bullish on the Pound (-1%)
- Strong support area is located circa 1.3245
- Upcoming events: UK Manufacturing PMI, US ADP Non-Farm Employment Change, US ISM Manufacturing PMI, FOMC Statement, Federal Funds Rate
The US Commerce Department showed that consumer spending, which constitutes nearly two-thirds of the US economic output, grew 1.0% in September, the strongest gain since 2009, after a modest 0.1% rise in the prior month.
The increase was driven by households replacing hurricanes -damaged vehicles as well as higher purchases on utilities. The Federal Reserve is set to announce its interest rate decision on Wednesday, taking into account current inflation trends.
Active day of fundamentals
The economic calendar on Wednesday is full of fundamentals events for all major currencies, including the US Dollar and the Pound. The day will start with the UK publishing its Manufacturing PMI at 0930GMT.
Subsequently, the United States is to release two additional sets of data, namely, the ADP Non-Farm Employment Change and ISM Manufacturing PMI for the month of October at 1215GMT and 1400GMT, respectively.
Meanwhile, the Federal Open Market Committee is set to release a statement together with its Federal Funds Rate at 1800GMT.
GBP/USD rapidly climbs to 1.3280
Although the US economy showed convincing signs of growth, the Pound continued to rapidly appreciate against the Dollar yesterday. The fact that the cable managed to return to mid-October level near 1.3295 indicates how actively traders are anticipating interest rate hike by the Bank of England, which even overshadows today's FOMC meeting.
From technical point of view, there is a need to notice that both on hourly and daily timeframes the pair is free to surge up until the weekly R2 located at the 1.3370 level (after passing through the above resistance).
Until release of the American data, the pair is expected to move horizontally near 1.3270. Afterwards, in case of plunge it is likely to be stopped by the 200-hour SMA fluctuating near 1.3180.
Hourly chart
On Tuesday, the Sterling closed the session with strong gains for the second consecutive session. As a result, the rate dashed through the weekly R1 at 1.3250. The given mark is reinforced by the monthly PP which was re-calculated in this session.
Meanwhile, the rate has shown reluctance to move down to the lower channel boundary circa 1.31. This factor together with technical indicators that are tended slightly northward might suggest that the most probable target during the following two weeks might be the upper boundary of the senior channel in the 1.3400/1.3450 area.
Daily chart
Market sentiment mixed
The bullish SWFX market sentiment has decreased slightly in this session, thus currently standing at 62% (-1%). In addition, 61% of pending orders are to buy the pair (+5%).
OANDA traders are bullish in this session with 53% of open positions are long on Wednesday (-2%). Meanwhile, Saxo Bank clients are still in favour of a fall; the number of short positions is located at 66% (+2%).