- 52% of pending orders in the 100-pip range are to SELL
- 54% of traders are bearish on the Sterling (+2%)
- Strong resistance area circa 1.3850
- Upcoming events: UK CPI y/y, UK PPI Input m/m, UK RPI y/y, Empire State Manufacturing Index
The US retail sales rose in December, as consumers bought more goods and the previous month's figures were revised up, indicating that the country's economy finished 2017 with solid momentum.
The Commerce Department stated that retail sales increased 0.4% in December, following an upwardly revised 0.9% gain previously. Data was likely to bolster expectations of a stronger increase in consumer spending in the Q4. Consumer spending, which contributes for more than 60% of the US economic activity, grew at a 2.2% yearly rate in the Q3.
British Consumer Price Index
Tuesday's trading session will start with the UK's Consumer Price Index, the Producer Price Index and the Retail Price Index for December to be released at 0930GMT. In addition, the Federal Reserve Bank of New York is to publish its Empire State Manufacturing Index at 1330GMT.
GBP/USD still before data release
Similarly to other major currency pairs involving the US Dollar, GBP/USD was trading sideways for the most session on Monday. After a quiet morning, the Sterling surged 49 pips, but then resumed its period of consolidation slightly below the weekly R1.
The Pound is currently testing the upper boundary of a three-month ascending channel circa 1.38. Given that this area is likewise reinforced by the weekly R1 and the monthly R3, it is unlikely that bulls manage to surpass the 1.3850 mark.
Meanwhile, the UK is to publish its monthly CPI data at 0930GMT. This data release might disrupt the pair's still movement and push the rate lower towards the 55-hour SMA and the monthly R2 near 1.37. In case no other significant events occur, the rate could remain in the 1.3700/1.3850 area today.
Hourly chart
As already expected, bears showed slight prevalence on Tuesday morning. The rate might still push slightly higher today; however, the general sentiment within this week should be tended southwards.
Daily chart
The SWFX sentiment remains bearish in this session, as 54% of traders are holding short positions (+2%). In addition, 54% of pending orders are to buy the Sterling (+1%).
Meanwhile, OANDA traders have increased their bearish sentiment by one percentage point today with 59% short positions. Saxo Bank clients share the same sentiment with 64% short positions (-3%).
Spreads (avg, pip) / Trading volume / Volatility