- 70% of pending orders in the 100-pip range are to BUY
- SWFX market sentiment is 54% bullish (+3%)
- Pound consolidates near 1.4060
- Upcoming events: G20 Meetings, UK CPI y/y, UK PPI Input m/m
The US Census Bureau revealed on Friday that the US building permits data did not meet expectations, showing the growth pace of only 1.30M units in February, following the downwardly revised 1.38M reading in the prior month.
The stronger-than-expected fall in the US homebuilding was caused by a plunge in the multi-family housing construction offsetting a rise in single-family projects for the second month in succession.
British Consumer Price Index
This trading session will start with the UK's Consumer Price Index and the Producer Price Index for the previous month published by the Office for National Statistics at 0930GMT. In addition, G20 meetings will likewise continue for the second consecutive day.
GBP/USD shoots up to 1.4060
The British Sterling was bounded by moving averages during the first part of Monday, thus trading in line with a short-term channel down.This lack of momentum changed significantly mid-session when a successful Brexit deal between the EU ad the UK shot up the rate by 1.03% within a couple of hours. As a result, the pair breached the prevailing senior channel and pushed as high as the weekly R2 at 1.4083.
Technical indicators still flash strongly bullish signals; however, their direction does show a tendency southwards. Thus, traders should see a bearish correction to the 1.40 area where the 55– and 100-hour SMAs are located.
In case no fundamentals shake the market today, it is unlikely that the 1.4080 is breached, thus paving the way for a slide south.
Hourly chart
Contrary to expectations, the 55-day SMA has managed to support the GBP/USD exchange rate for the last two weeks. The pair failed to breach this line on several occasions.
It is expected that the rate returns for a re-test of this moving average, the weekly S1 and the 61.80% Fibonacci retracement circa 1.3830 during the first part of this week. The pair could continue trading along this line, thus pointing to a period of appreciation.
Daily Chart
The SWFX market sentiment remains bullish with 54% long positions, compared to 51% on Monday. Moreover, 57% of pending orders are to buy the Sterling (+3%).
The market sentiment of OANDA has turned bullish with 53% of its clients holding long positions. Saxo Bank clients have increased their bearish sentiment by three percentage points, thus currently standing at 60% short positions.
Spreads (avg, pip) / Trading volume / Volatility