- The Swiss market is 52% bearish
- Pending orders in the 100-pip range are set to sell in 63% of cases
- No more UK data this week
The GBP/USD has declined even more than expected. Although, after passing support levels at 1.3040, the rate has traded sideways in an attempt to break back above the level.
Latest Fundamental EventThe British Pound depreciated against the US Dollar, following the UK Retail Sales data release on Thursday at 08:30 GMT. The GBP/USD exchange currency rate lost 8 pips or 0.06% during a minute, right after the release. The British Pound continued trading at the 1.3101 area.
The Office for National Statistics released UK Retail Sales data that came out lower-than-expected of negative 0.8% compared with forecasted negative 0.4%.
The ONS Head of Retail Sales Rhian Murphy said: Retail continued to grow in the three months to September with jewellery shops and online stores seeing particularly strong sales. This was despite a stark slowdown in food sales in September, following a bumper summer."
No more UK relative data
For the rest of the week there will be no macroeconomic data releases that might influence the GBP/USD. Although, macroeconomic data release traders are still set to be active this week.The data release with the biggest impact will be on Friday. The Canadian statisticians will publish the Canadian CPI and Core Retail Sales at 12:30 GMT.
The data release is expected to cause a sudden bounce in the USD/CAD of almost 80 base points.
GBP/USD short term review
On the hourly chart there are two scenarios for the GBP/USD.The rate might pass the resistance levels just below the 1.3050 mark and surge up to the 55-hour simple moving average near the 1.3090 level.
On the other hand, the rate would bounce off the resistance near the 1.3050 mark and decline. As the GBP/USD declines, it would approach and test the support of a large scale ascending pattern. Although, note the daily chart to see why this pattern should be passed.
Hourly Chart
The currency exchange rate has clearly bounced off the upper trend line of the dominant descending channel pattern. This has resulted in a decline, which is about to test the support of the lower trend line of a junior pattern.
The support line, which is strengthened by the 55-day simple moving average at 1.2990, is expected to slow down the decline. Although, eventually, the pair should pass it and continue to decline.
Daily chart
Since Monday, trader open positions were neutral. Although, the sentiment was slightly shifted tot eh bearish side, as 52% of positions were short on Friday.
Meanwhile, in the 100-pip range around the currency rate 62% of trader pending orders are set to sell. Previously, 58% of trader set up pending orders were to sell.
In general, the traders are still cautious about an upcoming decline, but they are prepared to short it, as the rate moves lower.