- 51% of pending orders in the 100-pip range are to SELL the Pound
- 52% of traders are bearish on the Sterling
- A cluster of resistance is located near 1.3950 mark
- Upcoming events: US Preliminary GDP
During this week everything was about the US Federal Reserve. Yesterday the expected testimony of the head of the Fed occurred. As a result, The Pound plummeted against the Greenback, as the Buck gained across the board. However, the situation is much easier to chart than on other pairs.
Durable goods orders report was one of the weakest currency triggers on Tuesday; in fact, it could not compete with the Fed Chair Powell testimony, making the overall sentiment hovering in limbo.
The Commerce Department said that the US durable goods plummeted 3.7% for the month of January. The drop occurred because the demand for transportation equipment tumbled 10.0%, reaching a six-month low, following a 2.6% increase in the prior month.
US GDP will dictate the rules
It is most likely that there will be still action occurring in the aftermath of the Jerome Powell' speech. However, there is another data set about to be released on Wednesday, which can be swing traded.
Namely, the US Preliminary GDP is scheduled to be published at 13:30 GMT. In regards to macroeconomic data releases this is the mother of all of them. The US Preliminary GDP has proven itself through mathematical tests to be second only to a change in the Federal Funds Rate announcement.
The data release will be covered by the Dukascopy research team on the bank's live webinar platform. The coverage is set to start ten minutes before the release. To join the webinar one needs to click on the notification that should pop up a minute before the start on all of the bank's trading platforms. On the other hand joining is possible at any time by either googling Dukascopy webinars or finding them in the TV section.
GBP/USD gets reviewed
Due to large volatility caused by various events in the recent trading sessions a broader look has been taken at the GBP/USD currency exchange rate.What was discovered first on the larger timeframes was that the pair is trading in a rather large scale descending channel pattern. The pair has bounced off this channel down pattern's upper trend line on 26th of February.
The event has resulted in the formation of a junior channel down pattern, which is guiding the pair lower at an even steeper angle.
In regards to the next trading session, the pair is set to meet the resistance of the junior pattern and test the support of the weekly S1 at the 1.3870 level.
Hourly chart
The daily chart's ascending channel was broken. The breaking of the pattern's support occurred due to the pressure created by the new large scale pattern. The new pattern is a simple descending channel, which is set to guide the pair until April.
However, there is additional information to be gained by examining the daily chart. Namely, the 55 and 100-day simple moving averages are set to provide support to the Pound against the Buck in the upcoming trading sessions.
Daily Chart
The bearish market sentiment continues to prevail, as 52% of traders are holding short positions (-2%). Meanwhile, pending orders are almost at equilibrium.
The market sentiment of OANDA traders remains bearish today with 55% of open positions being short. In the meantime, Saxo Bank clients are the most bearish market participants with 56% short positions.
Spreads (avg, pip) / Trading volume / Volatility