- 52% of pending orders in the 100-pip range are to SELL the Pound
- 54% of traders are bearish on the Sterling (+3%)
- 200-hour SMA restricts move above 1.40
- Upcoming events: US Core Durable Goods Orders m/m, Fed Chair Powell to testify, US CB Consumer Confidence
The Sterling was seen weaker against the US Dollar after the UK GDP growth report came in on Thursday. The GBP/USD currency pair lost 13 base points, or 0.09%, to 1.3878 to continue fluctuating while after.
The UK Office for National Statistics said that the second estimate for Britain's GDP growth in the final quarter of 2017 reflected a short downward revision from the first estimate, falling to the 0.4% quarterly growth pace. However, business investment growth remained stand-still, expansion in business services and finance within the services sector was the largest contributor to the increase of the UK's GDP. In annual terms, the UK economy grew 1.7%, slightly lower than expected.
Powell in focus
The main focus in this session is put on the United States. The newly-elected Federal Reserve Chair Jerome Powell is due to testify on the Semi-annual Monetary Policy Report before the House Financial Services Committee at 1500GMT (the text of the testimony will be released at 1330GMT). In addition, the US Census Bureau is going to publish the Core Durable Goods Orders during January, while, the Conference Board Inc is set to release its Consumer Confidence for this month at 1330GMT and 1500GMT.
GBP/USD stranded in narrow range
The Pound showed high volatility against the US Dollar on Monday, as the pair was trading in the 1.4063/1.3941 area during this time. Strong bearish sentiment took over the market mid-session when the rate plunge 121 pips within a couple of hours.It has since been moving in a narrow range, thus not being able to surpass the strong bounds of the 55– and 100-hour SMAs, the weekly PP and the 38.20% Fibo retracement. Given that the northern barrier is likewise limited by the 200-hour SMA and the monthly PP, the Sterling might fail to make big advances in either direction for a couple of hours. It is expected that support surrenders soon, forcing the rate down to the weekly S1 at 1.3871.
In case fundamentals do not disrupt the current market sentiment, the rate is unlikely to move above 1.40.
Hourly chart
The Sterling has failed to push higher within the previous days, thus suggesting that the bearish sentiment could guide the pair towards the 55-day SMA in the medium term. Daily technical indicators are likewise supportive of this scenario.
Daily Chart
The bearish market sentiment continues to prevail, as 54% of traders are holding short positions (+3%). Meanwhile, pending orders are at equilibrium.
The market sentiment of OANDA traders has once again turned bearish today with 54% short positions, compared to equilibrium on Monday. Saxo Bank clients are still bearish with 57% short positions (-2%).
Spreads (avg, pip) / Trading volume / Volatility