- 53% of pending orders in the 100-pip range are to SELL
- Traders are bullish with 55% long positions
- Downside potential until 1.3835
- Upcoming events: British Annual Budget Release, US CPI m/m, US Core CPI m/m
The Sterling depreciated against the US Dollar, following the release of factory output data on Friday. The GBP/USD exchange rate lost seven pips, or 0.05%, reaching the 1.3805 level.
The UK industrial output did not meet the forecasts in the month of January, growing only by 0.1%, following a little bit higher growth rate of 0.3% in the prior month. While the uptick may not be flattering, the UK Office for National Statistics still reported the ninth consecutive month of growth in domestic manufacturing companies, which means that the gain in January marks the longest growth streak since the beginning of ONS records in 1968.
Various fundamentals in focus
Tuesday's trading session will start with the HM Treasury publishing the British Annual Budget at 1130GMT.
Another important set of data that will surely grab trader attention mid-session is the US CPI and Core CPI for the month of February released at 1230GMT. The previous reading for the Consumer Price Index was a 0.5% increase, while the current forecast is a more moderate 0.2% growth month-on-month.
GBP/USD approaches trend-line
As previously expected, the Pound continues moving closer to a downward-sloping trend-line located near the 1.3910 mark for the third consecutive session. A 20-pip surge mid-Monday added some ground to the bullish sentiment, thus pushing the rate up to the 1.39 mark.The Asian session began with a slight decline for the Sterling that is likely to continue until the British Annual Budget Report and the US CPI published at 1130GMT and 1230GMT, respectively, introduce changes to the overall market sentiment.
In general, it is likely that fundamentals, especially the second event, dominate the market during the second part of the day. A possible trading range is the 55– and 100-hour SMAs and the weekly PP at 1.3850 from below and the weekly R1 and the monthly PP at 1.3935 from above.
Hourly chart
The GBP/USD currency pair was moving along the 55-day SMA during the previous week. The Pound, however, failed to surpass the 1.40 mark, thus diminishing its trading range.
Even though some upward momentum might still follow this week, it seems that the pair is ready to breach the aforementioned moving average decline down to the bottom boundary of the senior channel located near 1.3650.
Daily Chart
The market sentiment of SWFX traders is bullish with 55% of open positions being long for the second consecutive day. Meanwhile, 51% of pending orders are still to sell the Sterling (-4%).
The market sentiment of OANDA traders has turned bearish with 52% short positions, compared to it being neutral on Monday. Conversely, Saxo Bank clients are increasingly bearish with 60% of short positions (+3%).
Spreads (avg, pip) / Trading volume / Volatility