- 55% of pending orders in the 100-pip range are to SELL
- 63% of traders are bullish on the Pound (-1%)
- Strong support area is located circa 1.3180
- Upcoming events: US Employment Cost Index q/q, US Chicago PMI, US CB Consumer Confidence
The US Commerce Department showed that consumer spending, which constitutes nearly two-thirds of the US economic output, grew 1.0% in September, the strongest gain since 2009, after a modest 0.1% rise in the prior month.
The increase was driven by households replacing hurricanes -damaged vehicles as well as higher purchases on utilities. The Federal Reserve is set to announce its interest rate decision on Wednesday, taking into account current inflation trends.
US data reports
Three sets of data from the Unites States are to be released in this session. The US Bureau of Labour Statistics will publish the Employment Cost Index for the third quarter of 2017, while ISM-Chicago Inc is to release the Chicago Purchase Managers' Index at 1230GMT and 1345GMT, respectively.
The most important event that could shake the market today is the CB Consumer Confidence for the month of October to be released at 1400GMT.
GBP/USD returns to 1.32 level
The first arrests made in result of Robert Mueller's investigation as well as anticipation of the upcoming interest rate hike helped the pair to prematurely break through a massive resistance set up by three moving averages plus the weekly PP at 1.3160.
In general, bulls are expected to try to push the cable to the last Thursday's pre-fall level at 1.3270. However, today this attempt is likely to be blocked by another resistance level formed by the weekly R1 at 1.3250 and the upper trend-line of an alleged two-month long descending channel.
On the other hand, there is a need take into account effect from release of various American fundamental data later this day, which might either provide an additional impulse for a breakout to the top or drag the pair back to the 100-hour SMA.
Hourly chart
The rate managed to gain momentum and breach the weekly PP and the 55-day SMA circa 1.3175 on Monday. As a result, the rate was trading with low volatility between the weekly R1 at 1.3250 and the aforementioned support cluster.
By and large, the rate has remained in a relatively stable position during the past two weeks, thus failing to reach the lower channel boundary. This move, however, is still likely to occur, most probably during this week.
Daily chart
Market sentiment mixed
The bullish SWFX market sentiment has decreased slightly in this session, thus currently standing at 63% (-1%). In addition, 56% of pending orders are to buy the pair (-4%).
OANDA traders are bullish in this session with 55% of open positions are long on Tuesday (-2%). Meanwhile, Saxo Bank clients are still in favour of a fall; the number of short positions is located at 64%.