- 51% of pending orders in the 100-pip range are to SELL the Pound
- SWFX market sentiment is 67% bullish (-1%)
- No important fundamental releases, Dukascopy weekly webinar at 1200GMT
The Pound continues to trade sideways against the Greenback since mid-THursday.
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
The Office for National Statistics is going to publish the UK Public Net Borrowing at 0830GMT. This data release, however, tends to have muted effect. No other fundamental events that could have an impact on the given pair are to occur today.
Tune in for a Dukascopy webinar at 1200GMT.
GBP/USD waits for bullish breakout
The stronger US Dollar weighted negatively on the GBP/USD exchange rate yesterday morning, as it was pushed even lower down to the weekly S1 at 1.2960—its lowest position since September 2017.It seems that this week's weakness is caused by fundamental developments from both sides, especially uncertainty around Brexit. This has stopped any attempts to push the Sterling higher even despite trader sentiment being strongly bullish for the past few days.
Two scenarios are possible today. If the 55-hour SMA at 1.30 is breached, the Sterling should aim for the breached channel and the 100-hour SMA at 1.3150. Conversely, the next southern target is the 61.80% Fibo at 1.29. However, it is not expected that a strong bearish move is apparent today.
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 slightly increased to 68% on Friday (+1%). Saxo Bank clients share the same bullish sentiment with 61% of positions being long today.
Spreads (avg, pip) / Trading volume / Volatility