- 58% of pending orders in a 100-pip range are to sell the pair
- 71% of traders are bullish on the Pound
- Bank Holiday in the UK
- Upcoming Events: US Goods Trade Balance, US Preliminary Wholesale Inventories m/m
As it expected, the Sterling slightly appreciated against the Greenback after announcement of the UK Second Estimate GDP. Unfortunately, afterwards the Pound made two failed attempts to break above the northern boundary of a senior descending channel. Such outcome confirms that the pair should continue to move in the downward direction. However, the speech delivered by Janet Yellen later this day might turn around the rate and dissolve the current formation.
The combination of the UK economic reports contributed to the initial fall of the GBP/USD, though losses were offset immediately. The Sterling weakened against the US Dollar by 20 base points or 0.16% to rebound from the 1.2785 mark and continue moving upward. The Office for National Statistics reported that the preliminary estimate for the Britain's economic growth in the June quarter was confirmed at 0.3% in line with the previous release. The GDP figures revealed that the UK economy expanded at the slowest pace amongst the G7 this year, as the Brexit uncertainty caused dampening business investment, which missed expectations being flat in the reported period. Meanwhile, the weaker Pound hurt consumer spending more than supported exporters.
Calm trading day for GBP/USD traders
Even though over the last two days the currency rate remained flat, the general prognoses remain the same. Namely, the pair is expected to continue to move to the bottom, facing no significant barriers on its way.
GBP/USD opens near 1.2940
GBP/USD was driven by strong upside momentum on Friday that resulted in the pair closing at the 1.2886 mark, as sluggish US Durable Goods Orders sent the rate for a 57-pip hourly surge. The Pound opened at 1.2934 this session just below the monthly S1 and the weekly R1. Ths level, however, was not sustainable, as bears managed to push the pair back to the 1.2880 area by early Monday. Technical indicators support the rate edging lower. A significant level of support is set by the weekly PP and the 200-hour SMA near 1.2860. As no strong market movers are expected today, the rate should remain between 1.2860/1.2940.
Hourly chart
Friday's green candle confirmed a reversal that may set the pair for a surge in the long term. The rate managed to open higher at the 55-hour SMA, but was unable to sustain the given level. The bearish sentiment is expected to prevail in this session, positioning the pair near the 100-day SMA at 1.2900 until late Monday.
Daily chart
Sentiment remains bullish
The bullish GBP/USD sentiment dominates the market, as 71% of open positions are long (-1%). Meanwhile, 53% of pending orders are to sell the Pound.
OANDA traders have once again turned bullish on the pair, as 53% of open positions are long (+5%). On the other hand, traders at Saxo Bank share bearish sentiment, with the number of short positions standing at 59% (+1%).