- 60% of pending orders in the 100-pip range are to BUY the Pound
- SWFX market sentiment is at equilibrium
- Upcoming fundamentals: MPC Member Saunders and FOMC Member Williams to speak, IMF Meetings
It is likely that bulls try to regain some positions today after the massive two-day plunge.
The British Pound weakened against the Greenback, following the UK Retail Sales data release on Thursday. The GBP/USD currency pair lost 12 pips, or 0.09%, to continue fluctuating in the 1.4171 area.
The Office for National Statistics revealed lower-than-expected retail sales data for the month of March. Britain's sales volume declined by 1.2%, compared to 0.8% increase in the prior period.
One of the main reasons for such low consumer spending was due to the snow storms over the UK or as they call it: "Beast from the East", that discouraged people to go for a shopping, thus preventing the sales volume to increase to the forecast level.
Calm session
Two speeches are scheduled for this session. The External BO MPC Member Michael Saunders is due to speak at the University of Strathclyde's Fraser Allander Institute at 0930GMT. A speech by the President of the Federal Bank of San Francisco John Williams is to occur at 1515GMT.
Meanwhile, the International Monetary Fund is to hold meetings during the following three days.
GBP/USD plunges to trend-line
Following a 121-pip fall mid-Thursday, the Sterling entered a minor period of consolidation slightly below the 200-hour SMA. Any attempt to breach this moving average was disrupted by a massive hourly plunge which pushed the rate 0.76% or 107 pips lower down to a two-month trend-line.By Friday morning, the pair had not still recovered from this fall, and it was trading in a narrow range near the 1.4080 mark. It is more likely that this session marks a bullish reversal, as the market sentiment is expected to turn bullish after this two-day decline. The upside target should be the combined resistance of the 55– and 200-hour SMAs and the weekly PP at 1.42.
In case bulls fail to accelerate, the Pound might still edge slightly lower down to the senior channel, the monthly PP and the weekly S1 at 1.40.
Hourly chart
The Sterling was driven by strong downside potential this week. As a result, the pair plunged down to the combined support of the 55-day SMA, the monthly PP and a trend-line circa 1.4020. The strength of this cluster suggests that the Pound might fail to breach it immediately, thus trading along the 55-day moving average for the following sessions.
Daily Chart
The SWFX market sentiment stands at equilibrium in this session, compared to 55% short positions on Thursday. The number of pending orders are likewise at equilibrium.
Meanwhile, OANDA traders remain bearish on the Pound with 54% of their open positions being short (-5%). Saxo Bank is likewise decreasingly bearish with 54% of its clients holding short positions (-10%).
Spreads (avg, pip) / Trading volume / Volatility