- 51% of pending orders in the 100-pip range are to BUY
- 54% of traders are bullish on the Pound
- Important support lies circa 1.32
- Upcoming events: US CB Leading Index m/m, MPC Member Ramsden to speak
The Commerce Department said that the US homebuilding rose to the highest level of the year in October, where housing starts jumped 13.7% to a seasonally adjusted yearly rate of 1.29M units, while building permits added 5.9% to a 1.30M unit rate in October.
Strong figures were expected to contribute to stronger economic expansion in the US over the course of the Q4.
No significant events in this session
The economic calendar for Monday includes only fundamental events of minor or intermediate importance. The US Conference Board Inc. is going to release its Leading Index for the month of October at 1500GMT. In addition, the BOE Deputy Governor David Ramsden is due to speak at King's College in London at 1830GMT.
GBP/USD at crossroads of two channels
On Friday, after reaching the 1.3250 mark the cable made a sharp turnaround and slipped back to the 1.3180 level. From fundamental point of view, this movement matched with release of better than expected American housing data.
But from technical perspective it signified a rebound from an intersection of upper boundaries of two large descending and ascending channels. In this way bears have outlined strong resistance area through which the pair is unlikely to climb without proper upside momentum.
For this reason, the currency rate is expected to make another reversal even though the bottom trend-line of a junior ascending channel provides perfect support for gradual soar. The upcoming movement to the south is additionally supported by the aggregate market sentiment, which is 51% bearish.
Hourly chart
Following a rebound from the junior channel last week, the Pound has since accelerated against the US Dollar.
As apparent on the chart, the pair faces a significant resistance cluster formed by the 55-day SMA and the monthly PP at 1.3240. The Pound has already shown reluctance to move past this area on Monday morning. Thus, this level is likely to restrict the pair or even limit further gains during this session. The southern side is guarded by the weekly PP at 1.3182.
This range between both pivot points is expected to hold. However, the aforementioned resistance area might pressure the rate lower on Tuesday.
Daily chart
Bears strengthen their positions
The bullish SWFX market sentiment has not changed for the second consecutive session, as it is currently standing at 54%. In addition, 55% of pending orders are to buy the Sterling (+2%).
OANDA traders are bullish in this session, as 52% of open positions are long (unchanged from Friday). Meanwhile, Saxo Bank clients remain increasingly bearish on the pair, as 65% of their positions are short (+3%).