- 62% of pending orders in the 100-pip range are to SELL the Pound
- 52% of traders are bearish on the Sterling (-3%)
- The nearest significant support is located at 1.39
- Upcoming events: US PPI m/m, US Core PPI m/m, US Empire State Manufacturing Index, US Philly Fed Manufacturing Index, US Unemployment Claims, US Capacity Utilisation Rate, US Industrial Production m/m
The release showed that the US Consumer Price Index surged 0.5% over the course of January, beating expectations for only a 0.3% rise.
Expectations of further price pressure acceleration strenghtened as well, as the Fed is largerly expected to raise interest rates again in December. A seperate report showed that retail sales in the United States marked an unexpected decline of 0.3%, following a downwardly revised December's figure.
Session allocated to US fundamentals
This trading session includes fundamentals solely from the United States. The most attention should be put on 1330GMT when the US Bureau of Labour Statistics is to release the Producer Price Index and Core Producer Price Index for January. In addition, the Empire State Manufacturing Index, the Philly Fed Manufacturing Index and the weekly Unemployment Claims are likewise published at the same time.
Meanwhile, the Federal Reserve is to release its Capacity Utilisation Rate and Industrial Production at 1415GMT.
GBP/USD manages to breach psychological resistance
After hitting the weekly PP at 1.3915 on Wednesday morning, the Pound began edging lower and eventually breached the support of the 55– and 100-hour SMAs.
Similarly to other major currencies against the Greenback, the Sterling initially fell in the wake of solid US CPI data, but was subsequently driven by strong upside momentum within the following hours. As a result, the pair managed to advance up to the psychological 1.40 mark.
Technical indicators support a possible fall in this session which is likely to be limited by the support of the 200-, 55– and 100-hour SMAs and the weekly PP circa 1.39. Meanwhile, in case no fundamentals affect the rate in this session, the daily high is expected to be the weekly R1 at 1.4065.
Hourly chart
As apparent on the daily chart, the Pound has breached the bottom boundary of the prevailing three-month channel down. The expected surge south, however, did not happen, as bulls controlled the market this week.
The pair is likely to move higher during the remainder session, but could be tended south starting next week.
Daily Chart
The bearish market sentiment has weakened by three percentage points today, as 52% of traders are holding short positions. Meanwhile, pending orders are still at equilibrium.
The market sentiment of OANDA traders stands at equilibrium for the second consecutive session. Saxo Bank clients remain bearish with 58% short positions (-3%).
Spreads (avg, pip) / Trading volume / Volatility