- 65% of pending orders in 100-pip range are to buy
- 52% of traders are bullish on the Pound
- Gains could be capped near 1.3180
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Upcoming Events: UK CBI Realised Sales, US Core Durable Goods Orders m/m, US Unemployment Claims, US Durable Goods Orders m/m, GfK Consumer Conficence
Wednesday's preliminary estimate of the UK's gross domestic product for the second quarter matched analysts' estimates, but signalled that its expansion has lost some momentum in relation to the previous year. This was reflected in an instant fall of the GDP/USD exchange rate, which was trading at 1.3026 just after the data were published.
The Office for National Statistics reported that Britain's GDP rose 0.3% in the second quarter of 2017 as anticipated, while the yearly growth slowed from 2% to 1.7% in the same period. The UK services sector, which makes up the largest part of the economy, remained as the main contributor to the growth, offsetting weakness in manufacturing and construction.
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US Core Durable Goods Orders
Despite two minor data releases from the UK, t.i., Realised Sales collected by the Confederation of British Industry at 1000GMT and GfK Consumer Confidence at 2301GMT, the main focus in this session are the monthly US Core Durable Goods Orders and the weekly US Unemployment Claims at 1230GMT. In addition, the US is likewise to release monthly Durable Goods Orders, Goods Trade Balance and preliminary Wholesale Inventories at the same time.
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GBP/USD set for possible reversal
Contrary to the relatively flat movement sideways that was apparent during the last two trading days, the Pound surged against the US Dollar mid-Wednesday after not being able to pass through the weekly PP at 1.3019. Along the way, the rate was supported by the 55– and 200-hour SMAs and the weekly R1 until the upper boundary of the ascending wedge circa 1.3160 was reached on Thursday morning. It seems that the previous momentum upwards has lost some ground, indicating to a possible reversal south. However, the Pound may still test either the monthly R1 or the weekly R2 at 1.3177 and 1.3211, respectively. In general, the rate should trade lower, thus respecting the bounds of the aforementioned wedge at least until the 1.3040/80 area where the up-trend line is located.
Hourly chart
GBP/USD accelerated considerably mid-Wednesday, thus closing the given session with a 97-pip gain. The pair remained in the green area this morning as well, even despite the 38.2% Fibo providing strong resistance at 1.3146. There is still some potential until the upper wedge boundary located circa 1.3170 and reinforced by the weekly R1. This may function as a reversal point within the upcoming sessions. Meanwhile, the closest support is the 20-day SMA at 1.2988.Daily chart
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Traders get more cautious
The bullish market sentiment is gradually decreasing in strength, as 62% of open positions are long (63% on Wednesday). In addition, 53% of pending orders are to buy the Sterling.
In contrast, traders at Saxo Bank are bearish on the pair, with 64% of traders holding short positions (61% on Wednesday). Meanwhile, OANDA clients have turned slightly bearish once again, as the number of short positions is 54%.
Spreads (avg, pip) / Trading volume / Volatility