- 59% of pending orders in the 100-pip range are to BUY
- SWFX market sentiment is at equilibrium
- Rate faces significant support circa 1.3360
- Upcoming events: US Unemployment Claims, US Core PCE Price Index m/m, US Personal Spending m/m, US Chicago PMI, FOMC Members Quarles and Kaplan to speak
The US economy expanded at the fastest pace in three years, as businesses invested more in equipment and inventories, offsetting slackening in inflation.
The Commerce Department stated in its preliminary report that the US gross domestic product rose at a 3.3% yearly pace in the September quarter. Donald Trump wants diminished taxes to lift yearly GDP growth to 3% on a regular basis. Though, fiscal stimulus is likely to come only when the economy is at full employment.
US Unemployment Claims
The United States is to release a set of fundamentals in this session, namely, the weekly Unemployment Claims and the Core CPE Price Index and Personal Spending for the month of October at 1330GMT. In addition, ISM-Chicago Inc will publish its PMI at 1445GMT.
The Federal Reserve Governor Randal Quarles is due to speak about payment systems at the Financial Stability and Fintech Conference at 1730GMT, while the President of the Federal Bank of Dallas is to participate in a panel discussion at the Real Estate Council at 1800GMT.
GBP/USD jumps by 1.1% amid progress in UK and EU talks
On the one hand, the cable has reached the forecasted target at the 1.3406 level. On the other hand, the upper boundary of the junior ascending channel that was backed by the weekly S1 could not constrain the further surge. Moreover, the 47 pip jump in the early hours of this trading session allowed the pair to break not only through the monthly R1 but also the upper trend-line of a dominant descending channel.
As the pair two times in a raw failed to bypass the 1.3480 mark, a small retreat is expected to follow. However, if traders decide to readjust the above junior channel up, the correction might drag the pair back to 1.3400.
Nevertheless, in larger perspective an optimism related to Brexit is likely to continue driving the Pound towards the 1.3600 level.
Hourly chart
Bulls continue to dominate the market for the third consecutive session. The 69-pip surge apparent on Wednesday pushed the Pound above the weekly R1, while the monthly R1 and the weekly R2 were surpassed early on Thursday. It is likely that the latter holds a strong resistance in this session and thus limits gains above this area.
In case this upward momentum persists, it is expected that the pair continues to move higher in line with the ascending channel during the following weeks. However, a retracement from the senior channel could also come in the nearest time.
Market sentiment is mixed
The SWFX market sentiment is once again at equilibrium on Thursday. Meanwhile, 60% of pending orders are to buy the Pound (+5%).
The market sentiment of OANDA traders has turned bearish, as 54% of open positions are short (+2%). In addition, Saxo Bank clients share the same sentiment with 66% short positions (unchanged from Wednesday).