- 55% of pending orders in the 100-pip range are to SELL
- 52% of traders are bearish on the Sterling
- Bank holiday in US
- Upcoming events: UK Second Estimate GDP q/q, UK Preliminary Business Investment q/q
Commerce Department stated that the US durable goods orders fell sharply 1.2% in October, while its core measure marked sligtly weaker increase of 0.4% in the same period.
However, the solid growth trend was sutained, pointing to the stronger contribution to the GDP in the Q4. Meanwhile, the FOMS minutes suggested that the key interest rate could be raised soon, if the medium-term prospectives remain upbeat.
UK GDP estimate for Q3
Given the fact that banks in the US are closed due to Thanksgiving Day, only two fundamentals from the UK are scheduled for this session, namely, the British Second Estimate GDP and Preliminary Business Investment for the third quarter of 2017 released at 0930GMT.
GBP/USD surges to October maximum at 1.3338
Although initially the Pound was hit by first lines of the budget announcement, the subsequent revelation of details changed the sentiment lifted the rate to the weekly R1 at 1.3300, as expected. A release of the Fed Meeting Minutes only deepened the surge and pushed the rate to October high at 1.3338, as markets concentrated on traditional concerns over inflation and uncertainty about interest rate hikes next year.
During this trading session the pair is projected to move in southern direction not only because the upside momentum came to an end but also because it made a rebound from the upper edge of still active junior ascending channel.
Even though today the UK will release its Second Estimate GDP no substantial volatility is expected due to upcoming holidays in the United States.
Hourly chart
Following a rather disappointing US data release mid-Wednesday and other fundamentals during the day, the Pound surged against the US Dollar in the result of which the pair closed at the 1.3327 mark. It managed to push past the 55-hour SMA and the weekly R1 at 1.3255 and 1.3300, respectively. Thus, it was no surprise that traders were tended slightly bearish early on Thursday.
This sentiment could prevail for several hours until the weekly R1 possibly alters the rate's movement. The Pound it moving closer to the upper boundary of a long-term channel located in the 1.3360/80 area. Thus, the general direction of the Pound could be north within the following sessions.
Daily chart
Bears strengthen their positions
The SWFX market sentiment turned bearish this Thursday, as 52% of open positions are short. Meanwhile, 56% of pending orders are to sell the Pound (-1%).
OANDA traders have changed their sentiment to bearish, as 53% of open positions are short in this session. In addition, Saxo Bank clients are likewise bearish on the Sterling, as 67% of their positions remain short (unchanged from Wednesday).