- 69% of pending orders in the 100-pip range are to SELL the Pound
- 51% of traders are bearish on the Sterling (-1%)
- Strong resistance at 1.40
- Upcoming events: UK Average Earnings Index 3m/y, UK Claimant Count Change, UK Public Sector Net Borrowing, UK Unemployment Rate, UK Inflation Report Hearings, US Existing Home Sales, FOMC Meeting Minutes
Initially, the British Pound rose against the US Dollar despite lower-than-expected UK retail sales data, growing 11 base points to the 1.4118 mark. However, the GBP/USD pair went towards anticipated direction remaining in the short-term bearish trend.
Britain's shop sales appreciated less than anticipated in January, confirming the cautiousness of consumer spending in the reported period. The Office for National Statistics revealed that the volume of retail sales increased only 0.1%, following the revised drop of 1.4% in the prior month. However, the increase was brought by declines in all leading sectors with an exeption of non-food stores, which was associated with "getting fit" New Year's resolutions increasing the sales.
FOMC Meeting Minutes
The United Kingdom is to release four sets of data at 0930GMT, namely, the Average Earnings Index and the Unemployment rate for December and the Claimant Count Change and the Public Sector Net Borrowing during the previous month. In addition, the British Parliament is to hold the Inflation Report Hearings at 1415GMT.
The US National Association of Realtors is to publish data on existing home sales during January at 1500GMT. Meanwhile, the most noteworthy event in this session is the FOMC Meeting Minutes to be released at 1900GMT.
GBP/USD unchanged from Tuesday
Despite some minor fluctuations, the Pound has maintained the same price level for the second day. No advances either direction were made due to strong barriers on each side.
Today, the Sterling could continue trading between the 55– and 200-hour SMAs slightly below the 1.40 mark. The northern side is also restricted by the weekly and monthly PPs, while the southern area—by the 38.20% Fibo retracement. Thus, it is likely that the pair continues trading sideways for several hours, thus approaching the bottom line of a two-week ascending channel circa 1.3950 prior to forming a breakout.
Technical indicators are in favour of a bullish surge towards the senior channel. The pair's movement later in the evening should be guided by trader response to FOMC meeting minutes released at 1900GMT.
Hourly chart
The Sterling has failed to push higher within the previous days, thus suggesting that the bearish sentiment could guide the pair towards the 55-day SMA in the medium term. Daily technical indicators are likewise supportive of this scenario.
Daily Chart
The bearish market sentiment continues to prevail, as 51% of traders are holding short positions (-1%). Meanwhile, 64% of pending orders are to sell the pair.
The market sentiment of OANDA traders remains bearish with 55% short positions (-2%). Saxo Bank clients are likewise bearish with 59% short positions (+2%).
Spreads (avg, pip) / Trading volume / Volatility