- The Swiss market is 57% bullish on the pair
- 68% of pending orders in the 100-pip range are set to SELL
- UK Average Earnings Index on Tuesday at 08:30 GMT
The GBP/USD took the expected 100 pips with ease on Monday and even pierced the resistance levels, which were expected to stop it. Meanwhile, during the morning hours there was an important data release.
The British Pound appreciated against the US Dollar, following UK Average Earnings Index release on Tuesday at 08:30 GMT. The GBP/USD exchange currency rate gained 17 pips or 0.13% during a minute, right after the release.
The Office for National Statistics released the Average Earnings Index 3m/y better-than-expected of 2.6% compared with forecasted 2.4 %. The Index shows the change in the price businesses and the government pay for labour, including bonuses.
David Freeman, the ONS head of labour market statistics said: "With the number of people in work little changed, employment growth has weakened. However, the labour market remains robust, with the number of people working still at historically high levels, unemployment down on the year and a record number of vacancies. Meanwhile, earnings have grown faster than prices for several months, especially looking at pay excluding bonuses."
US data will come in on Wednesday
During the first two days of the week traders already experienced two UK data releases, which caused notable fluctuations in the financial markets. Although, the UK GBP affecting macroeconomic data releases are over.
However, US data is about to be released on Wednesday. The US Producers Price Index will be out on Wednesday at 12:30 GMT. The data release will be a part of the weekly macro release review webinar, which will begin on the bank's live webinar platform at 12:00 GMT.
In addition during that day the US Crude Oil Inventories will also cause a reaction in the financial markets. Namely, oil prices will increase volatility at 14:30 GMT.
Meanwhile, if you are just concentrating on the GBP/USD, then prepare for Thursday. On Thursday, at 11:00 GMT the official bank rate of the Bank of England will be published at 11:00. It is expected to cause fluctuations in the range from 40 to even 180 base points in the GBP/USD.
GBP/USD short term review
The British pound surged 1.08 % against the US Dollar due to fundamentals on Monday. The rate ignored most technical levels, but the weekly R1 at the 1.3040 mark together with the 100.00% Fibo stopped and held the rate at the 1.3040 level for the rest of Monday and Tuesday's midnight hours.In regards to the near future, the rate should be stopped by the upper boundary of the ascending medium pattern to retrace back into the pattern. The SMAs will try to catch the rate during Tuesday's session.
On the other hand, the rate may use the support of the weekly R1 and the support of the SMAs, which might push the rate to surge even higher to break the pattern.
Hourly Chart
On the daily chart one can clearly observe that the recent surge is a part of an ascent in the previously drawn ascending pattern of the daily chart.
If it's upper trend line holds its ground and forces the pair into a move to the lower trend line of the pattern, it will be assumed that it will be the one to guide the currency exchange rate to the upper trend line of a larger dominant channel down pattern.
Daily chart
The Swiss trader sentiment remains largely bullish. Namely, traders of the Swiss Foreign Exchange were long in 56% of all of their open positions.
In the meantime, trader set up orders, which indicate where the rate most likely will go next, are set to sell the pair in 51% of all cases. This fact indicates that the retail traders are undecided in regards to the pair's short term future.
Meanwhile, OANDA traders remain largely bullish, as 63% of open positions are long at the brokerage. In the meantime, traders at SAXO Bank are 53% long on the GBP/USD pair. The long term sentiments both have decreased since Friday.
Spreads (avg, pip) / Trading volume / Volatility