- 56% of all pending orders are to sell the Pound
- 60% of all open positions are long
- Gains should be capped around 1.2730
- Significant support rests circa 1.2624
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Upcoming Events: US Initial Jobless Claims, US HPI, US CB Leading Index
US oil inventories fell for the second consecutive time last week, official data showed on Wednesday. As reported by the Energy Information Administration, the number of barrels of crude oil dropped 2.5M in the week ended June 16, compared to the preceding week's decline of 1.7M barrels, while analysts predicted a much lower drop of 1.2M barrels. US crude oil production climbed to 9.35M barrels per day, 20K higher than in the prior week, the EIA reported. Gasoline stockpiles plunged 578K, whereas analysts anticipated a gain of 444K barrels.
In the meantime, distillate stocks advanced 1.1M barrels, surpassing expectations for a 465K-barrel increase. US refinery runs fell 104K bpd as the utilisation rate dropped 0.4% to 94%. The number of barrels of crude oil held in storage at the Cushing, Oklahoma, plunged 1.08M barrels during the reported week. Oil prices rose shortly after the report was published but failed to sustain those gains. Thus, soon after the release, West Texas Intermediate futures fell to $43.41 per barrel, whereas Brent futures declined to $45.79 per barrel.
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US HPI and Jobless Claims
On Thursday there are only two events to focus on – both from the US. First of all, the Initial Jobless Claims, which are a measure of the number of people filing for state unemployment insurance. In other words, it provides a measure of strength in the labor market. A larger than expected number indicates weakness in this market, which influences the strength and direction of the US economy. The other data release is the US HPI. It provides an estimated value of housing market conditions. It is also an important indicator, as the housing market is considered as a sensitive factor to the US economy.
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GBP/USD anchored around 1.27
As was anticipated, the Sterling done its best to erase most of Tuesday's losses yesterday, but was still unable to fully reclaim the 1.27 level, which resulted in a close 30 pips lower. The Cable is now expected to maintain trade between the monthly S2 and the monthly S1, with the exchange rate mostly gravitating towards the 1.2750 area. Consequently, another bullish development today would confirm this scenario, even though some technical indicators suggest otherwise. Furthermore, the GBP/USD currency pair has been sliding down for five weeks in a row now, which only adds fuel to the already bearish ‘fire'. A possible trend-line at 1.2730 could also limit today's gains should they occur. In case bears manage to prevail, the pair is unlikely to drop far below the monthly S2 or the 1.26 major level.
Hourly chart
The daily chart shows the Cable edging lower for the sixth week in a row now, currently with the exchange rate mostly caged between the monthly S1 and the monthly S2. A number of other supports is bolstering the lower boundary of this trading range, which are likely to contribute to the Cable's possible recovery.Daily chart
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Traders remain neutral
Market sentiment turned bullish today, as 60% of all open positions are long. At the same time, there are 56% of all pending orders set to sell the British Pound.
A less optimistic situation is observed elsewhere. The sentiment at OANDA remains bearish, namely 55% of all open positions are short and the remaining 46% are long. Meanwhile, sentiment at Saxo Bank is also bearish, with 56% of traders now being short and the other 44% - long on the Sterling against the US Dollar.
Spreads (avg, pip) / Trading volume / Volatility
Traders see Pound recovering
© Dukascopy Bank SATraders believe the Cable is to fall below the 1.28 major level by the end of the next three months, as 52% of survey participants share this belief. While the current price is around 1.2650, the average forecast for September 22 is 1.2786. The 1.24-1.26 range is now the most popular price interval, having 20% of the votes, while on the second place is the 1.20-1.22 interval, with 16% of the voters choosing it.