- 53% of pending orders in a 100-pip range are to buy the pair
- 69% of traders are bullish on the Pound
- Significant resistance lies circa 1.30
- Upcoming Events: US S&P/CS Composite-20 HPI y/y, US CB Consumer Confidence, UK BRC Shop Price Index y/y,
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.
Main event - CB Consumer Confidence
The economic calendar for Tuesday's trading session includes some minor data from both the UK and the US, such as monthly US S&P/CS Composite-20 HPI at 1300GMT and monthly UK BRC Shop Price Index at 2301GMT. However, the main attention today is put on Consumer Confidence released by the US Conference Board at 1400GMT.
GBP/USD tries to break 1.2944
Fortunately for the Pound, the eight-hour downfall was stopped already near the 1.2880 level. Accordingly, the rest of the day the Sterling spent in a recovery against the US Dollar. By the moment, the pair has reached a combined resistance level set up by the weekly R1 at 1.2942 and the monthly S1 at 1.2944. From a daily chart perspective, the further surge seems unlikely. On the other hand, an extensive fall is not expected as well, as the southern side is secured by the 55-, 100- and 200-hour SMAs together with the weekly R1 at 1.2858. It is quite possible that the rate will stuck at the above resistance for some time. In this sense, a decisive signal is expected to be given by release of information on the US CB Consumer Confidence at 14:00 GMT.
Hourly chart
Even despite the strong bearish momentum that set the pair as low as the 1.2880 mark on Monday, the rate managed to close flat slightly above the 55-day SMA. The weekly S1 that served as an unbreakable barrier yesterday was breached this morning when the Pound returned near the 20-day SMA. Gains, however, are likely to be limited, leaving the pair near the 1.2960 mark.
Daily chart
Sentiment mixed among traders
The bullish GBP/USD sentiment dominates the market, as 69% of open positions are long (-2%). Meanwhile, 54% of pending orders are to sell the Pound (+1%).
OANDA traders are likewise bullish on the pair, as 52% of open positions are long (-1%). On the other hand, traders at Saxo Bank share strong bearish sentiment, with the number of short positions standing at 62% (+3%).