- 55% of pending orders in the 100-pip range are to BUY the Sterling
- SWFX market sentiment is 64% bullish (-1%)
- Upcoming fundamental events: UK Retail Sales m/m; US (Core) Retail Sales m/m and Unemployment Claims
The Sterling could break out from bearish channel.
The British Pound weakened against the Greenback, following the UK CPI data release on Wednesday. The GBP/USD currency pair lost six pips, or 0.04%, to continue fluctuating in the 1.3319 area.
The Office for National Statistics released Consumer Price Index data that came out in line with a forecast of 2.4% in May, staying unchanged from the previous period.
"Partially offsetting downward effects came from price changes for games, domestic electricity, food and non-alcoholic beverages, and furniture and furnishings," said a representative from the Office for National Statistics.
US, UK Retail Sales
The first data release of importance today is the UK Retail Sales during May to be released at 0830GMT. The US monthly Retail Sales and its core reading are scheduled for 1230GMT. The US weekly Unemployment Claims are published at the same time.
GBP/USD overcomes resistance
GBP/USD was trading between the 200-hour SMA and the weekly S1 on Wednesday. Bulls gained the dominant hand during the second half of the session; however, gains were limited by the strong resistance of the 55-period (4H), 100– and 200-hour SMAs.This barrier was breached early today, thus pointing to a soon breakout of the five-day descending channel and a continuous surge. The positioning of technical indicators demonstrate that there is still some upside potential that could be realised today. The nearest level of resistance is the monthly PP at 1.3427, while the Sterling might likewise target the breached channel line at 1.3475.
In case this was a false breakout, the rate is likely to fall back down to the weekly S1.
Hourly chart
The Sterling has plunged 7.28% against the US Dollar since mid-April. Despite lingering near the 200-day SMA for a couple of days, downside risks prevailed and pushed the rate as low as the 1.3245 late in May.
As apparent on the chart, the Pound has started to recover from its six-month low. This appreciation is expected to continue during the following two weeks. The nearest significant resistance is the monthly PP at 1.3430, while this upward surge should continue until the 200-day SMA, at least.
Daily Chart
The SWFX market sentiment is 64% bullish today (-1%). Likewise, 54% of pending orders are to buy the Pound (-1%).
The market sentiment of OANDA is strongly bullish, as 65% of its traders are holding long positions (-2%). Saxo Bank clients are likewise bullish with 59% long positions.
Spreads (avg, pip) / Trading volume / Volatility