- 56% of pending orders in the 100-pip range are to BUY the pair
- SWFX market sentiment is 51% bearish (-1%)
- Strong resistance near 1.41
- Important for today: ISM Manufacturing PMI, Bank Holiday in the UK
The Sterling is likely to breach short-term channel today that result in a surge up to the 1.41 mark.
The British Pound strengthened against the Greenback, following the UK current account data release on Thursday. The GBP/USD currency pair gained only three pips, or 0.02%, in the first minute after the release, to continue fluctuating in the 1.4049 area.
The Office for National Statistics revealed the deficit of £18.4B in Britain's current account in the Q4 of 2017. The gap between imports and exports reduced compared to the previous period; however, analysts forecast the gap to increase up to £24.0B. It was a small relief for Britain to realise that it is approaching Brexit without relying too much on foreign investors.
US Manufacturing PMI, UK Bank Holiday
The only important fundamental event scheduled for this session is the US Manufacturing PMI published by the Institute for Supply Management at 1400GMT. Analysts forecast a slight contraction to 60.1 in March, compared to 60.8 during the previous month.
Meanwhile, banks in in the United Kingdom are closed due to Easter Monday.
GBP/USD shows slight tendency north
Following two sessions of decline, the bearish sentiment of the GBP/USD exchange rate allayed considerably on Friday. The pair halted slightly above the psychological 1.40 mark and remained fluctuating in the 1.4020/60 range for the whole session.By Monday morning, the Sterling had reached the 55-hour SMA, thus providing additional pressure from above. The slight tendency upwards apparent on Friday does suggest that this moving average could be breached, thus pushing the rate towards a more significant resistance formed by the 100– and 200-hour SMAs and the weekly PP near 1.41. This level which roughly coincides with a breached channel is likely to be today's high.
Meanwhile, a fall below 1.40 should not occur in this session, as this mark is supported by the monthly PP.
Hourly chart
The Sterling has been appreciating gradually against the US Dollar since the beginning of March – the movement which has been guided by the 55-day SMA.
The previous week marked a change is sentiment, as the pair fell from its two-month high of 1.4240 towards the aforementioned 55-day moving average located at 1.40. It is likely that this line guides the pair during the following sessions, especially when being reinforced by the monthly PP, the weekly S1 and the 38.20% Fibonacci retracement. A breakout south could be followed by depreciation in the medium-term down to the 100-day SMA circa 1.38.
Daily Chart
The SWFX market sentiment remains bearish with 51% short positions (-1%). Meanwhile, 53% of pending orders are now to buy the Sterling.
The number of short positions of OANDA traders has remained at 51% for the second session. Saxo Bank clients share the same sentiment with 53% short positions (+1%).
Spreads (avg, pip) / Trading volume / Volatility