- 61% of pending orders in the 100-pip range are bearish
- SWFX market sentiment is 54% bullish (+1%)
- Upcoming fundamental events: US Core PCE Price Index m/m and Personal Spending m/m, Chicago PMI
Bulls are likely to dominate the pair in this session following the massive plunge mid-Friday.
The British Pound weakened against the Greenback, following the UK Prelim GDP data release on Friday. The GBP/USD currency pair lost 71 pips, or 0.51%, to continue fluctuating in the 1.3812 area.
The Office for National Statistics released Preliminary Gross Domestic Product data for Q1 2018, that came out less-than-expected of 0.1%, failing to reach the forecast of 0.3%, showing the slowdown, compared to 0.5% increase in the Q4 2017.
One of the main reasons for low UK GDP's growth pace is due to the construction being the biggest downward pull, causing the GDP to reach the lowest increase since Q4 2012.
No major market movers today
This week is likely to start calmly for the EUR/USD exchange rate, as this session includes only three fundamental releases and all of moderate importance. The US Bureau of Economic Analysis is set to publish the Core PCE Price Index and Personal Spending for March at 1230GMT. The Chicago PMI is published at 1345GMT.
GBP/USD plunges after sluggish GDP report
GBP/USD experienced another day of weakening on Friday. After failing to surpass the 55– and 100-hour moving averages near 1.3950 early in the day, it began falling. Additional bearish pressure was provided by the disappointing UK GDP release as a result of which the Pound lost 171 pips against the US Dollar and stopped slightly above the monthly S1 at 1.3750.During the subsequent hours the Pound was trading sideways in a very narrow range. This demonstrates that the bearish sentiment might have finally allayed, thus allowing for a move northwards in this session. It is expected that the daily high should be the 1.39 mark which is reinforced by several noteworthy resistance levels.
In terms of support, the pair is unlikely to fall below the weekly S1 at 1.3679.
Hourly chart
The Sterling has depreciated substantially against the Greenback during the past two weeks. Last week marked a breakout from the 55- and 100-day SMAs that add some ground to continuous downside potential.
By Monday morning, the pair had approach the lower boundary of the senior channel circa 1.3960. It seems that the following days should mark a brief bullish reversal prior to breaching this long-term pattern and approaching the 200-day SMA near 1.35.
Daily Chart
The SWFX market sentiment remains bullish today, as 54% of open positions are long (+1%). Meanwhile, 65% of pending orders remain to sell the Pound (+12%).
The market sentiment of OANDA traders has turned bullish, as 56% of them are holding long positions. This is a strong advance if compared with Friday's equilibrium. Saxo Bank clients share the same sentiment with 53% long positions.
Spreads (avg, pip) / Trading volume / Volatility