- 71% of pending orders in the 100-pip range are to BUY
- 59% of traders are bullish on the Pound (-3%)
- Strong support area is located circa 1.32
- Upcoming events: UK Construction PMI, BOE Inflation Report, MPC Official Bank Rate Votes, UK Monetary Policy Statement, UK Official Bank Rate, US Unemployment Claims, BOE Governor Carney and FOMC Members Powell and Dudley to speak
The Sterling touched the new high against the Greenback after the PMI for the UK manufacturing sector was released. The GBP/USD jumped 0.24% or 32 base points to 1.3318, though the British Pound was unable to sustain gains and fell further after the US economic data.
Markit/CIPS report showed that the Britain's Manufacturing PMI climbed to 56.3 points in the month of October, as the volumes of new orders and production entered the final quarter of 2017 on a strong footing. Moreover, better-than-anticipated data cemented projections for the Bank of England to raise its key interest rates tomorrow. The Sterling gained additional support this week after the progress on Brexit talks was made, but the bearish sentiment was confirmed in the pair for now.
Britain to take leading role
This trading session consists primarily of fundamental data from the United Kingdom. The day will start with the British Construction PMI for the month of October at 0930GMT. In addition, the Bank of England is set to publish the following data at 1200GMT: the BOE Inflation Report, MPC Official Bank Rate Votes, Monetary Policy Statement, Official Bank Rate, Asset Purchase Facility and MPC Asset Purchase Facility Votes. Subsequently, the US will release its Unemployment claims at 1230GMT.
Meanwhile, the Governor of the Bank of England Mark Carney and the Federal Reserve Governor Jerome Powell are likewise to speak at 1230GMT, while the President of the Federal Reserve Bank of New York William Dudley is to deliver closing remarks at the Alternative Reference Rates Committee Roundtable at 1620GMT.
GBP/USD prepares for BoE decision
In result of release of various American fundamental data, the cable stopped the surge and returned back to the 1.3250 mark, from which it made a rebound in the beginning of this trading session. Until announcement of the Bank of England decision, the pair most probably is going to move horizontally near the 1.3290 level.
Afterwards, the Pound is widely expected to strengthen. The surge might be quite sharp, as northern side contains no barriers except for an alleged resistance at 1.3338 and the weekly R2 at 1.3370. The upside momentum might be additionally reinforced if President Trump will pick Governor Powell, as the new Fed Chair. The upward movement is also supported by existence of a medium-term ascending channel.
Hourly chart
The Sterling closed the Wednesday's trading session with a 36-pip fall in value against the US Dollar. The rate, however, remained at the same range between the weekly R1 and the weekly R2, as the former together with the monthly PP provided a strong support circa 1.3250 both yesterday and today.
Given that major fundamentals are scheduled for this session, the rate could fluctuate in the 1.34/1.32 area.
Daily chart
Market sentiment mixed
The bullish SWFX market sentiment has decreased slightly in this session, thus currently standing at 59% (-3%). In addition, 69% of pending orders are to buy the pair (+8%).
OANDA traders are bullish in this session, as 53% of open positions are long on Thursday (unchanged from Wednesday). Meanwhile, Saxo Bank clients are still in favour of a fall; however, the number of short positions has decreased to 64% (-2%).