- 63% of pending orders in the 100-pip range are to BUY
- SWFX market sentiment turns bearish
- Downside potential until 1.4050
- Upcoming events: US (Core) Durable Goods Orders m/m
The British Pound jumped versus the Greenback after the UK official bank rate was released on Thursday. The GBP/USD currency pair registered a 55-pip up-move, but soon came down and closed its one minute candle with a gain of 25 pips, or 0.18%, to continue declining down to the 1.4159 area.
The Bank of England's official rate came out in line with expectations. In fact, last time when there was a discrepancy with the forecast was back in July 2016. The BoE decided to leave its interest rate unchanged at 0.5% for the third straight month, however, hints of hiking rates were left, as two out of nine Monetary Policy Committee members voted in favour of raising interest rates.
US Core Durable Goods
The only significant fundamental event in this session is the US (Core) Durable Goods Orders to be released at 1230GMT. Analysts expect a 0.5% increase in the core reading, compared to a 0.3% decline during the preceding month.
GBP/USD consolidates above 55-hour SMA
The Sterling was trading at its seven-week high of 1.4170 on Thursday morning, as the strong resistance of the weekly R3 did not allow it to push above this mark for several hours.High volatility was introduced at 1200GMT when the BOE published its Monetary Policy Summary. Even though its benchmark rate was kept steady in line with expectations, the surprise element was introduced by MPC Official Bank Rate votes. The impact was the rate's fluctuation in a 92-pip range after the release.
The subsequent price decline was stopped by the 55-hour SMA which has guided the pair ever since. The pair consolidating slightly above this line suggests that some downward momentum until 1.4050 could occur. Technical indicators, on the other hand, are bullish and favour a climb towards the 1.4170 area.
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.
The strong momentum on Wednesday allowed the pair to move away from this moving average and re-locate itself near the 1.42 mark. Technical indicators on this time-frame demonstrate that the Sterling is more likely to push higher within the following sessions prior to returning at the 55-day SMA, the monthly PP and the 38.20% Fibonacci retracement circa 1.40.
Daily Chart
The SWFX market sentiment has once again turned bearish with 52% short positions. Meanwhile, 65% of pending orders are to buy the Sterling (+1%).
The market sentiment of OANDA remains 52% bearish for the second consecutive day. Following the significant increase on Thursday, Saxo Bank clients have reduced their bearish sentiment by six percentage points today, thus currently standing at 59% short positions.
Spreads (avg, pip) / Trading volume / Volatility