- 55% of pending orders in a 100-pip range are to sell the pair
- 64% of traders are bullish on the Pound
- Market sentiment is 67% bullish
- Upcoming Events: US Crude Oil Inventories and New Home Sales
Yesterday the currency rate has left the rectangle formation in the southern direction and, thus, additionally confirmed an existing and dominating downtrend As a result, today it is expected to try to test the weekly S1, which is located at the 1.2799 level and, at the moment, represents the only notable support level on the way to the bottom.
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.
American housing data in focus
The current trading day is also expected to pass quite quietly from the point of view of swing traders. The only event that might have certain value and effect on the given currency pair is an announcement of data on the US New Home Sales at 14:00 GMT.
GBP/USD breaks through 1.2846
In accordance with one of the scenarios expressed yesterday, the currency exchange rate made a confident breakout from the rectangle formation and slipped to the bottom. The likely impulse for such outcome was provided by a combination of the 55- and 100-hour SMAs near the 1.2881 mark.
At the moment, the currency rate has only one barrier on its way, which is set up by the weekly S1 at 1.2799. In the short run, the pair might a make a rebound. But, given the general downtrend that started in the beginning of August, the Pound is expected to continue to lose value against the US Dollar.
Hourly chart
Yesterday the currency pair has finally confirmed its exit from the long-term rising wedge formation. Given that the northern side is now reliably secured by the 55- and 100-day SMAs, the surge in the nearest perspective seems unlikely.
In the meantime, the exchange rate does not face any support up until the 23.6% Fibonacci retracement level, which makes it the most plausible target.
Daily chart
Sentiment remains bullish
The bullish sentiment has increased slightly on Monday, with 69.30% of open positions being long. Meanwhile, 69% of pending commands in 50-pip range are to sell, while in 100-pip range this number amounts to 58%.
It can be observed that OANDA traders are almost neutral, as 52.80% of open positions are short. Meanwhile, traders at Saxo Bank are bearish on the pair, with 57% of traders holding short positions.