- 73% of pending orders in the 100-pip range are to SELL the Pound
- SWFX market sentiment is 67% bullish (+2%)
- Empty economic calendar
Traders should watch the 55- and 200-hour SMAs at 1.3120.
The British pound weakened against the Greenback, following the UK CPI data release. The GBP/USD currency pair lost 46 pips, or 0.36%, to continue fluctuating in the 1.3039 area.
The Office for National Statistics released CPI data that came lower-than-expected of 2.4%, compare to forecasted 2.6% and stayed unchanged from the previous period.
A Senior Economist from Hargreaves Lansdown, Ben Brettell said: "Markets had been pricing in around an 80% chance the Bank would lift borrowing costs in August, but today's inflation data combined with yesterday's lacklustre wage growth figures could force policymakers into a rethink."
Quiet day
No important data releases are scheduled for today.
Meanwhile, the BOE Deputy Governor Ben Braodbent is due to speak about the history and future of quantitative easing at the Society of Professional Economists at 1700GMT.
GBP/USD fails to surge after breakout
The Sterling found support at the 100-hour SMA early on Tuesday and consequently began appreciating. Bulls managed to push the rate through the weekly PP and the 55-period (4H) and 200-hour SMAs at 1.3130; however, a surge did not follow.It is likely that the pair finds support at this cluster and thus continue moving higher during the following sessions. The ultimate near-term target is the upper boundary of a three-month channel down and the 200-period SMA near 1.3120. A one important resistance level to take into account today is 1.3180 where a trend-line and the 100-period SMA are located.
Given that there are no important fundamental releases today, the rate might lack the necessary momentum to break any of the aforementioned support and resistance clusters.
Hourly chart
By reviewing the daily chart of the GBP/USD pair, it was discovered that there exists a descending channel pattern that has been in action since the middle of April. The recent rebound managed to break this pattern.
Thus, it is assumed that there is a larger dominant pattern lacking from the picture, as the already broken pattern has to be a junior representation of a larger price movement.
Daily Chart
The general sentiment remains strongly bullish. Some even expect to open more long positions, if the currency rate reaches certain criteria, such as a breakout from resistance on the daily chart.
The market sentiment of OANDA is 68% bullish on Wednesday (+4%). Saxo Bank clients share the same bullish sentiment with 58% of positions being long today (+1%).
Spreads (avg, pip) / Trading volume / Volatility