- The portion of orders to acquire the British Pound increased from 44 to 58%.
- 58% of all open positions are short
- The nearest support is at 1.3170
- Immediate resistance is around 1.3222
- 52% of traders reckon GBP/USD will be at 1.30 or lower in three months
- Upcoming events: UK GDP Second Estimate, UK Preliminary Business Investment, US GDP Annualized, US Goods Trade Balance, Fed Chair Yellen's Speech, Revised UoM Consumer Sentiment
New orders for US manufactured capital goods climbed in July for a second month, fresh figures revealed on Thursday. According to the Department of Commerce, demand for all durable goods rose 4.4% in the reported month, the highest reading since October 2015. Market analysts expected US orders for long-lasting goods to increase 3.4% in July, following last month's 3.9% upwardly revised drop. Excluding transport, orders jumped 1.5% in the same month, compared to June's 0.4% upwardly revised decline and surpassing the 0.4% market forecast. The gain in overall durable goods orders was mainly driven by a 10.5% rise in demand transportation equipment. Orders for civilian aircraft, which are extremely volatile month to month, advanced 89.9% in July, while orders for automobiles remained flat.
Meanwhile, the rise in core durable goods orders follows an increase in oil and gas drilling activity. Other data released on Thursday showed the number of Americans filing for unemployment benefits dropped to 261,000 in the week ending August 20, following last week's 262,000 claims. Economic desks penciled in a slight acceleration to 265,000 in the reported period. This marks 77 consecutive weeks of initial claims below 300,000, the longest streak since 1973. The four-week moving average fell to 264,000 from 265,250 seen in the previous seven days.
UK and US GDP second estimates, Janet Yellen's speech
Today rather important data is due both concerning the UK and the US. From the UK the GDP Second Estimate is due, which shows the change in inflation-adjusted value of all goods and services produced in the UK. GDP is the broadest measure of a country's economic activity, however, this is the second release and it tends to have a lesser impact than the preliminary one. The US GDP Annualized shows the monetary value of all goods, services and structures produced within the US in a given period of time. It is a gross measure of market activity, because it indicates the pace at which a country's economy is growing or decreasing. This too is the second estimate, thus, the impact will be lesser than that of the preliminary one. Finally, probably the most important event today will be Janet Yellen's speech at 14:00 PM GMT. As head of the US central bank, she has more influence over the nation's currency than any other person. Close attention will be paid to her speech and her comments, interpreting them either bearish or bullish towards the US Dollar. The most anticipated insight from her concerns the interest rate hike during today's meeting in Jackson Hole.
GBP/USD attempts to reclaim 1.32
The GBP/USD currency pair declined on Thursday, amid stronger-than-expected US fundamentals boosting the American Dollar that day. As a result, the pair slid back under 1.32, but technical indicators retain mixed signals, creating a possibility for another rally. Another bullish outcome would mean a breach of the immediate resistance, namely the weekly R1, opening the door for a surge towards the 1.33 major level and perhaps even towards the second resistance area around 1.3350. However, we should not rule out the Cable experiencing another leg down, leading to a break through the monthly PP at 1.3170.
Daily chart
The British currency edged lower against the Buck on Thursday, confirming the two-week up-trend. However, some violation attempts were made, indicating that a downside breakout is possible. On the other hand, different data suggests the Cable is to continue appreciating, following the up-trend until at least the 1.33 mark is reached.
Hourly chart
Still no consensus
Traders' sentiment remains bearish, now at 58%, compared to 56% on Thursday. At the same time, the portion of orders to acquire the British Pound increased from 44 to 58%.
Indecision appears to be widespread, as the same neutral sentiment is observed among the traders of other brokers. At OANDA, 5053 of positions are long and 47% are short. The sentiment at Saxo Bank is now bearish, as the numbers of longs and shorts each take up 44% and 56% of the market, respectively.
Spreads (avg, pip) / Trading volume / Volatility
Majority sees the GBP/USD below 1.30 in three months
Slightly more than half of traders (52%) believe the British currency is to cost 1.30 or less dollars after a three-month period. The most popular price interval, however, was selected by 17% of the voters, namely the 1.26-1.28, while the second most popular choices imply that the Sterling is to cost either between 1.24 and 1.26 dollars, between 1.34 and 1.36 dollars or even between 1.36 and 1.38 dollars in three months, all three chosen by 12% of the surveyed. At the same time, the mean forecast for Nov 26 is 1.3077.