- Retail sector is 69% bullish on the pair
- 56% of pending orders in the 100-pip range are set to sell
- UK Average Earnings Index on Tuesday
On Monday, the GBP/USD currency exchange rate fluctuated near the 1.2750 mark. The reason for the almost horizontal trading was the support provided by a monthly pivot point at 1.2744
The Greenback strenghened against the British Pound, following the UK GDP and other data set release. The GBP/USD currency pair lost 10 pips, or 0.08%. After the significant drop of the main pair, it started to recover itself, but few minutes later, the main pair has dropped even more to continuing flactuaction in the same area.
Office for National Statistics released Gross Domestic Product data that came lower-than-expected of 0.1% with the forecasted 0.2%. This data set is relatively new, because of that, there is no historical data for it. Although, the UK GDP data release was strong enough to cancel out the positive effect of more than one other data releases. Namely, Manufacturing Production, Preliminary GDP and others.
Rob Kent-Smith, ONS head of national accounts says "The economy picked up a little in the second quarter with both retail sales and construction helped by the good weather and rebounding from the effects of the snow earlier in the year. However, manufacturing continued to fall back from its high point at the end of last year and underlying growth remained modest by historical standards."
Nothing until Tuesday
There are no notable data sets scheduled to be released on Monday. However, on Tuesday morning the release of the UK Average Earnings at 08:30 GMT is set to influence the currency markets.
Meanwhile, note that the week's economic calendar will be reviewed on the Dukascopy live webinar platform at 12:00 GMT.
GBP/USD: bearish pressure remains
Downside risks have pressured the GBP/USD exchange rate lower for two consecutive weeks. Following a breakout from the senior channel on Thursday, the Pound fell even lower and eventually reached a fresh one-year low - the monthly S2 at 1.2750 mid-Friday. Since then, the pair has been trading with volatility above this monthly support.Given that the Pound remains strongly oversold, it seems that bears have exhausted their strength, thus giving opportunity for bulls to take over the market soon. Strong upside pressure will be necessary to dash through the combined resistance of the 55– and 100-hour SMAs and the weekly PP at 1.2840.
It is more likely that the Sterling tries to push higher today; however, if a fall nevertheless occurs, the 1.26 mark should not be surpassed.
Hourly Chart
The GBP/USD currency exchange rate continued to decline in value for the last three months. This fall occurred when the pair broke a long-term ascending channel on April 27.
Furthermore, the Japanese candlestick opens above a support cluster set by the combination of the weekly and the monthly pivot points near the 1.29 mark. This could suggest that an upside movement on the smaller time frame is apparent during the following trading sessions.
Daily chart
SWFX traders remain bullish today on the GBP/USD pair, as 69% of open positions were LONG during the morning hours.
However, additional long positions are unlikely going to be open. Retail traders of the Swiss Foreign Exchange have set up 57% of all of their pending trade orders to sell. Previously 59% of all orders were set to buy.
Meanwhile, OANDA traders remain largely bullish, as 69% of open positions are long at the brokerage. In the meantime, traders at SAXO Bank are 63% long on the GBP/USD pair.
It can be deducted from all of the sentiment information that the markets for now are expecting a long term surge. Although, retail traders of Dukascopy at the same time are also taking advantage of a smaller scale rebound.
Spreads (avg, pip) / Trading volume / Volatility