- 51% of pending orders in a 100-pip range are to buy the pair
- 64% of traders are bullish on the Pound
- Notable support is located at the 1.2846 mark
- Upcoming Events: Day of silence
The British Pound is continuing to move against the US Dollar in a rectangle or triple bottom formation Most probably, today the currency rate is going to try to break through the support located at the 1.2846 level one more time
The Sterling gained 14 base points against the US Dollar, as the UK Retail Sales report showed slightly better-than-expected data. The GBP/USD currency pair rose 0.11% to be seen trading near the 1.2901 mark just for a while and then retreated to the previous level.
However, on Friday morning the Pound was strong enough to repeat the post-release gains. The Office for National Statistics revealed that Britain's retail sales surged 0.3% month-over-month in July, above expectations for a 0.2% rise, though the figure was weaker than a 0.6% registered in June.
Higher food sales managed to offset a decrease in spending on other goods. Moreover, the UK retail sales are expected to show modest expansion this year, if real wage growth keeps falling behind inflation.
Another holiday for swing traders
As economic calendar shows, second day of this week also lacks any significant macroeconomic data releases from both sides of the Atlantic. The only data release that is worth to look at is the UK Public Sector Net Borrowing that will be published today at 8:30 GMT.
GBP/USD rebounds from weekly PP at 1.2910
The latest developments in the GBP/USD currency pair forced to partially review the situation.
On the one hand, the Pound expectedly rose and bounced off from the weekly PP at 1.2910. On the other hand, the subsequent fall through the 55- and 100-hour SMAs entails that the pair is rather moving in a rectangle or triple bottom formation that in the descending triangle.
If the first assumption is true, the Pound has to eventually break through the 1.2846 level to the bottom and continue to move in a downtrend. This scenario seems rational since the 200-hour SMA is located way above the current market price.
But if the second assumption is true, the pair should change the direction and start to move to the north.
Hourly chart
Contrary to expectations, even in the early Tuesday morning it is still not very clear, in which direction the currency rate is going to continue to move. The gradual slip towards the 23.6% Fibonacci retracement level still seems a more viable scenario.
Daily chart
Sentiment remains bullish
The bullish sentiment has increased slightly on Monday, with 68.50% of open positions being long. Meanwhile, the dominant number of pending orders remains bearish, currently standing at 63% to sell the Pound.
It can be observed that OANDA traders are almost perfectly neutral, as 52.15% of open positions are short. Meanwhile, traders at Saxo Bank are bearish on the pair, with 60% of traders holding short positions.