- 54% of pending orders in the 100-pip range are to SELL the Pound
- SWFX market sentiment remains neutral
- The nearest resistance is set by the 200-hour SMA at 1.41
- Important for today: British Services PMI, US Unemployment Claims, FOMC Member Bostic to speak
GBP/USD has not left the 1.4020/1.4100 range for the fifth consecutive session.
The British Pound weakened against the Greenback, following the UK construction PMI data release on Wednesday. The GBP/USD currency pair lost only five pips, or 0.03%, to continue fluctuating and going even lower to the 1.4064 level.
The Markit revealed lower-than-expected data in Britain's purchasing managers index in March. The construction PMI stepped lower to 47.0, compared to 51.4 in the prior period. One of the main reasons that caused the return to the contraction is March's bad weather, and there is a real correlation in between. Moreover, Input cost inflation is getting closer to a 20-month low, and this was the sharpest decline in civil engineering in the last five years.
British Services PMI in focus
Wednesday's trading session will start with the British Services PMI published by Markit at 0830GMT. Analysts expect that the index should weaken to 53.9 during March, compared to 54.5 during the preceding month.
The US Department of Labour will publish the weekly Unemployment Claims at 1230GMT. In addition, the President of the Federal Reserve Bank of Atlanta Raphael Bostic is due to speak about financial literacy at the University of South Florida at 1700GMT.
GBP/USD remains at Wednesday's level
GBP/USD has failed to pick up momentum after the Easter holidays, as it has remained trading in a range between 1.4020 and 1.41. A move above the latter level has been restricted by the weekly PP and the 200-hour SMA.The general tendency, however, has remained slightly upwards. This suggests that if the aforementioned resistance is breached, the pair might go for a surge with no limits up to the 1.4175 mark.
On Thursday morning, the rate's positioning is between all three SMAs. Analysts expect that the British Services PMI released today at 0830GMT might introduce high volatility in the market, thus surely surpassing one of these barriers. The bullish scenario was already discussed above. In case the 55– and 100-hour SMAs are breached, a move below the monthly PP at 1.40 is unlikely.
Hourly chart
The Sterling has been appreciating gradually against the US Dollar since the beginning of March – the movement which has been guided by the 55-day SMA.
The previous week marked a change is sentiment, as the pair fell from its two-month high of 1.4240 towards the aforementioned 55-day moving average located at 1.40. It is likely that this line guides the pair during the following sessions, especially when being reinforced by the monthly PP, the weekly S1 and the 38.20% Fibonacci retracement. A breakout south could be followed by depreciation in the medium-term down to the 100-day SMA circa 1.38.
Daily Chart
The SWFX market sentiment stands at equilibrium for the third consecutive session. Meanwhile, 58% of pending orders are to sell the Sterling (+7%).
OANDA traders have once again turned bearish on the Pound with 52% of their open positions being short. Saxo Bank clients are likewise bearish with 54% holding short positions (+3%).
Spreads (avg, pip) / Trading volume / Volatility