- Pending orders in the 100-pip range are at equilibrium
- Market sentiment is also at equilibrium
- Strong support near 1.38
- Upcoming events: MPC Member Haldane and FOMC Members Dudley and Brainard to speak, IBD/TIPP Economic Optimism
The Sterling rallied against the US Dollar in the wake ofthe report by Markit on the UK services industry. The GBP/USD exchange rate gained 27 base points or 0.19% to the 1.3816 mark to continue fluctuating in the 1.3810 area.
Britain's economy notably strengthened its growth pace in February, following the prior month, ending the weakest period since the recession of 2009. According to the IHS Markit report, the UK Services PMI rate grew to 54.5, compared to 53.0 in the previous month, topping the estimate of 53.3. Economists believe Britain is likely to sustain its growth rate as of late 2017. However, the resistance from weak consumer spending and cautious investors could persist.
Session with speeches
This trading session includes three speeches. The President of the Federal Bank of New York William Dudley is set to speak about the economic impact of 2017 hurricanes at 1230GMT, while The Federal Reserve Governor Lael Brainard will deliver a speech titled "Economic and Monetary Policy Outlook" at 2230GMT.
In terms of the UK, the speech by the BOE Chief Economist Andy Haldane is scheduled for 1815GMT.
GBP/USD: bearish correction could occur
The Sterling managed to advance 85 pips against the US Dollar during the first past on Monday. Further upside momentum was disrupted by the combined resistance of the weekly and monthly PPs circa 1.3860.The inability of bears to take advantage of this situation resulted in a slight period of consolidation between 1.3860 and 1.3830. Given that the northern barrier is likewise guarded by the 200- hour SMA, bulls are unlikely to gather enough momentum for a breakout. Thus, that the pair could edge lower during the following hours until the 55– and 100- hour SMAs limit a further decline below 1.38.
Meanwhile, the medium-term pattern suggests that the Sterling is likely to appreciate this week; thus, the 1.3860 should eventually be breached to allow for a surge up to 1.3950.
Hourly chart
The daily chart's ascending channel was broken. The breaking of the pattern's support occurred due to the pressure created by the new large scale pattern. The new pattern is a simple descending channel, which is set to guide the pair until April.
However, there is additional information to be gained by examining the daily chart. Namely, the 55- and 100-day simple moving averages are set to provide support to the Pound against the Buck in the upcoming trading weeks.
Daily Chart
The market sentiment of SWFX traders stands at equilibrium for the second consecutive session. Meanwhile, 53% of pending orders are still to sell the Sterling.
The market sentiment of OANDA traders has turned bearish with a 1% prevalence of short positions. In addition, Saxo Bank clients are also bearish with 52% short positions.
Spreads (avg, pip) / Trading volume / Volatility