- 56% of pending orders in the 100-pip range are to SELL the Pound
- 56% of traders are bearish on the pair
- The pair remains near a trend-line
- Important for today: BOE Credit Conditions Survey, US Unemployment Claims, BOE Governor Carney to speak
The pair is supported by the 55-hour SMA which might hinder the expected decline today.
The British Pound weakened against the Greenback, following the UK Manufacturing Production data on Wednesday. The GBP/USD currency lost 10 pips, or 0.07%, to continue fluctuating in the 1.4190 area.
The Office for National Statistics revealed lower-than-expected data in Manufacturing Production in February. On month-to-month basis factory production decreased by 0.2%, compared to a growth of 0.1% in the prior month. Surprisingly, but Britain's construction and manufacturing sectors output showed downturn, being the main cause for this decrease. The Britain's economic activity in Q1 showed its growth pace to slow down a little bit, based on the February's activity data.
Rather uneventful day
The Bank of England is set to release its Credit Conditions Survey at 0830GMT. In addition, the BOE Governor Mark Carney will deliver closing remarks at the Public Policy Forum's Canada growth summit at 1900GMT.
Meanwhile, the only fundamental event from the United States in this session is the weekly Unemployment Claims released at 1230GMT.
GBP/USD pressured by two barriers
Mid-Wednesday was spent with high volatility for the GBP/USD exchange rate. Trading slightly below the 1.42 mark early in the day, the Sterling managed to use its minor upside potential and shoot up to a downward-sloping trend-line at 1.4225. Along the way, a steep short-term channel up was breached to the downside. A fall did not follow, as the pair was restricted by the 55-hour SMA.Considering that the Pound has failed to edge higher during the previous two sessions, it is unlikely that the post-Brexit-vote high at 1.4313 is tested today. Thus, the base scenario favours either a breakout of the 55-hour moving average and a test of the 1.41 area or a minor period of consolidation which should squeeze the rate between the trend-line and the 55-hour SMA.
Hourly chart
The Sterling has been appreciating gradually against the US Dollar since the beginning of March – the movement which has been guided by the 55-day SMA.
Technical indicators on the daily time-frame are gradually moving south, so a breakout of the 55-day SMA is expected within the following weeks. This scenario is likewise supported by the pair's downward-sloping movement in two long-term channels.
A breakout of the 55-day SMA should push the Pound towards the 100-day moving average currently located near the 1.38 mark.
Daily Chart
The SWFX market sentiment is once again bearish, as 56% of open positions are short in this session (+3%). In addition, 53% of pending orders is to sell the Sterling.
OANDA traders remain bearish on the Pound with 59% of their open positions being short (+5%). Saxo Bank is likewise bearish with 61% of its clients holding short positions (-3%).
Spreads (avg, pip) / Trading volume / Volatility