- 52% of pending orders in the 100-pip range are to BUY
- SWFX market sentiment is 53% bullish
- BOE Monetary Policy Statement in focus
- Upcoming events: UK Retail Sales m/m, MPC Official Bank Rate Votes, BOE Monetary Policy Summary and Official Bank Rate, UK's Asset Purchase Facility and MPC Asset Purchase Facility Votes, US Unemployment Claims, MPC Member Ramsden to speak
The British Pound strengthened against the Greenback, following one high and two medium impact releases that were published simultaneously on Friday. The GBP/USD currency pair skyrocketed 46 pips, or 0.32%, leaving the impact-making dataset cluster behind.
The Office for National Statistics released 3 reports at 9:30 GMT: average earnings index, claimant count change and unemployment rate. A notable impact on the exchange rate was driven by the UK average earnings index data that saw the index growing by 2.8%. An interesting move was seen in the growth of claimant count change, while the unemployment rate decreased, thus creating a positive impact on the currency pair altogether.
Traders re-focus on Bank of England
Following the FOMC Monetary Statement late on Wednesday, the main focus in this session is now turned to the Bank of England which is set to publish the MPC Official Bank Rate Votes, the Monetary Policy Summary ad the Official Bank Rate at 1200GMT. Its benchmark rate is expected to remain at 0.50%. Prior to this, the British Office for National Statistics is to publish Retail Sales for the month of February at 0930GMT.
The only noteworthy fundamental event from the United States in this session is the weekly Unemployment Claims to be released at 1230GMT.
GBP/USD calm after surge
GBP/USD was guided primarily by the 55-hour SMA during the first part of Wednesday which allowed to reach a three-week resistance of 1.4080.Bullish strength was added late in the evening when the Fed increased its benchmark rate to 1.75%, but did lower the number of projected hikes to three this year. This caused a significant weakening of the US Dollar across all major currencies and thus paved the way for the Sterling to test the weekly R3 at 1.4170.
Technical indicators are starting to retrace from their high positions. This points to possible depreciation during the following hours, at least. Volatility is likely to increase mid-session when the BOE is to release its Monetary Policy Summary at 1200GMT. Downside potential today is the 1.40 area, while strong resistance is set at 1.4250.
Hourly chart
Contrary to expectations, the 55-day SMA has managed to support the GBP/USD exchange rate for the last two weeks. The pair failed to breach this line on several occasions.
The strong momentum on Wednesday allowed the pair to move away from this moving average and re-locate itself near the 1.42 mark. Technical indicators on this time-frame demonstrate that the Sterling is more likely to push higher within the following sessions prior to returning at the 55-day SMA, the monthly PP and the 38.20% Fibonacci retracement circa 1.40.
Daily Chart
The SWFX market sentiment remains bullish with 53% long positions. Moreover, 64% of pending orders are to buy the Sterling (+2%).
The market sentiment of OANDA has once again turned bearish with 52% of its clients holding short positions. Saxo Bank clients have increased significantly their bearish sentiment today, thus currently standing at 65% short positions (+9%).
Spreads (avg, pip) / Trading volume / Volatility