- 59% of pending orders in the 100-pip range are to SELL the Pound
- SWFX market sentiment is 64% bullish (-3%)
- Upcoming fundamental events: US (Core) Durable Goods Orders m/m, US Unemployment Claims
The Pound is hindering near the 200-period (4H) SMA circa 1.3210.
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."
US Core Durable Goods Orders
The US Census Bureau will release the monthly (Core) Durable Goods Orders and its core reading at 1230GMT. The core reading which excludes transportation items, has generally had more significance on the given pair. The weekly Unemployment Claims are published at the same time.
GBP/USD limited by 200-period SMA
The last four trading sessions have been beneficial for the GBP/USD exchange rate, as it has appreciated 1.90% since July 19. At the time, the pair reversed from the senior channel line and is now moving gradually towards its upper boundary near 1.3250.As apparent on the chart, this strong bullish momentum has allayed which is caused primarily by the 200-period (4H) SMA being located at 1.3210. This has resulted in a slight movement sideways today right below this line.
It is expected that the pair continues appreciating until the senior channel; however, the aforementioned long-term SMA might postpone this up-move today if no fundamentals strengthen bulls. The daily high is likely to be 1.33, while the daily low— a support cluster at 1.3120.
Hourly chart
During the past two months, the Pound has been weakening against the US Dollar in a descending channel. The pair breached a more senior pattern this week and thus is likely to push towards the junior one and the nearby-located 55-day SMA and the monthly R1 at 1.33 during the following trading days.
The general medium-term tendency should be north towards the 200-day SMA near 1.37. This scenario should be confirmed if the aforementioned 55-day moving average is breached. Technical indicators support this bullish scenario.
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 breaks out from resistance on the daily chart.
The market sentiment of OANDA is 64% bullish on Wednesday (-4%). Saxo Bank clients share the same bullish sentiment with 58% of positions being long today.
Spreads (avg, pip) / Trading volume / Volatility