- 60% of pending orders in the 100-pip range are to SELL
- 51% of open positions are to BUY
- Rate faces significant resistance circa 1.3485
- Upcoming events: BOE Press Conference, Official Bank Rate, US Retail Sales
In result of the interest rate hike yesterday, the cable formed new rising wedge formation. Accordingly, the surge is expected to last until the rate reaches the 50% Fibonacci retracement level at 1.3485 that crosses the upper boundary of a senior descending channel.
The number of employed people in the UK dropped again in October, indicating that employers were turning more cautious ahead of Brexit. Meanwhile, pay growth accelerated slightly, remaining lower than inflation. The Office for National Statistics reported that the unemployment rate held at historical low of 4.3%. The Bank of England hiked rates last month, expecting that stronger job market could boost wage growth, though today it is widely expected to keep rates on hold.
Bank of England Meeting
At 12:00 GMT the Bank of England is expected to announce its decision on the Official Bank Rate hike. However, the more important event will happen a little bit later when Governor Carney will start holding the press conference.
GBP/USD crosses 200-hour SMA
Despite the pressure from three moving averages as well as from other technical indicators, the pair ended the day near the 1.3420 mark. Today the cable is expected to continue the rally due to absence of any notable barriers on its way up until the 50% Fibonacci retracement level located at 1.3485. In case of appreciation of the buck, a combination of the weekly PP and the 200-hour SMA or the monthly PP and the 100-hour SMA should constrain the downfall. However, these support and resistance barriers might be relatively easy broken due to the upcoming Bank of England meeting as well as release of information on the UK and US Retail Sales.
Hourly chart
At the moment, the cable is fluctuating near the upper boundary of a three-month long descaling channel. In order to make a fully-fledged rebound, the currency rate will need to reach the 50% Fibonacci retracement level first. So, generally, the Pound is expected to continue losing value against the Dollar. However, there is a need to take into account possible modification of this scenario from news on Brexit.
Daily chart
The bullish market sentiment has decreased on Thursday, with 52% of open positions being long (-1%). In addition, 51% of pending orders are to buy the Sterling (-3%).
OANDA traders remain bearish, as 53% of open positions are short (+0%). Saxo Bank clients share the same sentiment with 60% short positions (-2%).
Spreads (avg, pip) / Trading volume / Volatility
Actual Topics
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