- 55% of pending orders in the 100-pip range are to SELL the Pound
- SWFX market sentiment is 61% bullish (-1%)
- Upcoming fundamental events: US (Core) Retail Sales m/m, Empire State Manufacturing Index
The 200- and 100-hour SMAs are likely to guide the pair in this session.
The British Pound strengthened against the Greenback, following the UK Service PMI data release on the previous Wednesday at 08:30 GMT. The GBP/USD currency pair gained 25 pips, or 0.19%, to continue fluctuating in the 1.3209 area.
The Markit released the monthly UK Purchasing Managers' Index data that came out better-than-expected of 55.1, and also better from the previous period.
A currency analyst at TorFX Laura Parsons stands: "A combination of better-than-forecast UK construction data and worse-than-expected Eurozone retail sales figures kept the GBP/EUR exchange rate steady on Tuesday,"
US Retail Sales
The only significant fundamental event today is the US Retail and Core Retail Sales at 1230GMT. Analysts forecast an increase of 0.4% for both readings. This data release will be covered by the Dukascopy Analysts Team.
Meanwhile, tune in for the Weekly Calendar Review at 1200GMT.
GBP/USD with strong resistance ahead
Downside risks dominated the Pound during the first part of Friday's trading session. This fall was stopped mid-session when the rate reversed from the 1.3130 mark and subsequently surged 112 pips within a couple of hours. The rate breached the 55–, 100- and 200-hour and 55– and 100-period (4H) SMAs along the way which might point to further advance.The nearest resistance is formed by the 200-period moving average at 1.3268 which might still put bearish pressure on the Sterling and thus limit gains today. Technical indicators flash bearish signals. A fall, however, should likewise be restricted by the above SMAs located slightly above the 1.32.
The ultimate low in this session is likely to be the weekly S1 at 1.31, while bullish gains should not exceed the 1.33 level.
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
This indicates that for the last couple of trading sessions nothing has changed. Retail traders remain bullish and some even expect to open more long positions, if the currency rate reaches certain criteria. For example, it breaks the resistance on the daily chart.
The bullish market sentiment of OANDA has remained intact, as 69% of its traders are holding long positions (+2%). Saxo Bank clients are increasing their bullish sentiment with 64% of positions being long today (+4%).
Spreads (avg, pip) / Trading volume / Volatility