- 63% of pending orders in the 100-pip range are to SELL
- 51% of traders are bullish on the Pound (-3%)
- Important resistance lies circa 1.33
- Upcoming events: UK Public Sector Net Borrowing, UK Inflation Report Hearings, US Existing Home Sales, Fed Chair Yellen to speak
The Commerce Department said that the US homebuilding rose to the highest level of the year in October, where housing starts jumped 13.7% to a seasonally adjusted yearly rate of 1.29M units, while building permits added 5.9% to a 1.30M unit rate in October.
Strong figures were expected to contribute to stronger economic expansion in the US over the course of the Q4.
British Inflation Report Hearings
Tuesday's trading session will start with the UK Public Sector Net Borrowing for October at 0930GMT. In addition, the British Parliament is to hold its quarterly Inflation Report Hearings at 1000GMT.
Meanwhile, the US will publish its Existing Home Sales for the previous month at 1500GMT. The day will end with the Fed Chair Janet Yellen participating in a panel discussion titled "In Conversation with Mervyn King" at the New York University Stern School of Business at 2300GMT.
GBP/USD tries to break from two large channels
From technical perspective, the cable was expected to make a rebound from an intersection of two senior channels. However, the news about improved offer for the final financial settlement made by the British government led to spike of the price of Pound.
Depending on how markets will interpret today's inflation report hearings, the pair might either return back into boundaries of the dominant channels or confirm its yesterday's breakout to the top. In any case, there is a need to take into account that the current advance in junior ascending channel is additionally supported by the rising 55-hour SMA as well as the monthly PP at 1.3238.
But in the meantime, majority of traders continue to have bearish outlook on the pair.
Hourly chart
Upside risks continue to dominate the GBP/USD currency pair. As a result, the Pound managed to overcome the monthly PP at 1.3240 early on Tuesday.
However, it is likely that the 55-day SMA located nearby provides a strong barrier in this session, thus reversing the pair to the opposite direction. Gains could be limited today, thus sending the pair for a slight correction south tomorrow.
If looking at more distant support and resistance levels, the Sterling is trading between the weekly PP and the R1 in the 1.3152/1.3300 area.
Daily chart
Bears strengthen their positions
The bullish SWFX market sentiment has weakened on Tuesday, as it is currently standing at 51% (-3%). Meanwhile, pending orders have returned to equilibrium.
OANDA traders are bullish in this session, as 53% of open positions are long (+1%). Meanwhile, Saxo Bank clients remain increasingly bearish on the pair, as 68% of their positions are short (+3%).