- 62% of pending orders in the 100-pip range are to SELL the Pound
- 52% of traders are bullish on the Sterling
- Pair bounced off dominant support
- Upcoming events: Nothing left
The dominant support was met exactly as expected. The currency pair rebounded against it. However, the situation has become rather complicated on Friday morning.
The Sterling rose against the US Dollar ahead the report on the UK manufacturing sector activity. Stronger-than-anticipated data for February drove the GBP/USD pair's exchange rate up by six base points, or 0.05%, to reach the 1.3759 level right after the release.
Britain's manufacturing sector continued to lose its strength last month; in fact, it was its lowest growth in eight months. Despite the fact that the number of orders had grown, output increased more slowly.
Markit/CIPS reported that the UK Manufacturing PMI fell to 55.2 in the reported month, the second-lowest level since June 2016 Brexit vote, but still an inch above the 55.0 long-term average.
The week has ended
The economic calendars on Friday have nothing notable on them. Due to that reason swing traders are set to start watching next week's calendar and plan their week accordingly.
In regards to the UK releases there will be some minor notable events occurring. On Monday the UK Services PMI will be published, and on Friday the UK Manufacturing Production data will be out.
Meanwhile, US labour data will be released with the ADP payrolls on Wednesday and official data on Friday. All of the mentioned data releases will be covered by the Dukascopy research team on the bank's live webinar platform.
GBP/USD gets squeezed in
Finally the exact location of the dominant support can be marked, as the Pound has fully confirmed the trend line by surging against the US Dollar.The surge resulted in the breaking of the junior channel down pattern's resistance. However, the ascent of the currency exchange rate was stopped on Friday morning by the 55-hour simple moving average.
In general, the pair is either going to break the SMA and move to the 1.3870 mark or make another attempt to pass the long term support below.
Both scenarios can be played. So watch out for a break out from this rather rare squeeze in.
Hourly chart
The daily chart's ascending channel was broken. The breaking of the pattern's support occurred due to the pressure created by the new large scale pattern. The new pattern is a simple descending channel, which is set to guide the pair until April.
However, there is additional information to be gained by examining the daily chart. Namely, the 55 and 100-day simple moving averages are set to provide support to the Pound against the Buck in the upcoming trading sessions.
Daily Chart
The bearish market sentiment remains unchanged, as 52% of traders are holding short positions. Meanwhile, Swiss Foreign Exchange pending orders are bearish, as 58% are set to sell.
The market sentiment of OANDA traders has become neutral. In the meantime, Saxo Bank clients are less bearish market participants with 52% short positions.
Spreads (avg, pip) / Trading volume / Volatility