- 53% of pending orders in the 100-pip range are to BUY the Sterling
- SWFX market sentiment is 63% bullish (-5%)
- G7 summit to start today
Technical indicators point to further decline today.
The British Pound strengthened against the Greenback, following UK Construction PMI data release on Monday. The GBP/USD currency pair gained only three pips, or 0.02%, to continue going up afterwards.
The Markit released Construction Purchasing Managers' Index data that came out a little bit better-than-expected, however stayed unchanged from the previous period of 52.5.
"Higher prices for fuel, raw material shortages, higher labor costs combined with slow delivery times were further obstacles to growth as firms nervously assessed their workforce for much-needed talent and sub-contractors could name their price," said Tim Moore, Senior Economist at IHS Markit and author of the Markit/CIPS Construction PMI.
G7 summit
The G7 summit is to start today and continue until late Saturday. This fundamental event might cause turbulence in the market, as tough talks on trade, tariffs and other major issues are expected to be among topics put on the table.
GBP/USD calm after strong volatility
The Sterling showed significant volatility against the US Dollar on Thursday which was seemingly caused by mounting tensions around Brexit. This weakened the British currency by 0.6% against its American counterpart, thus sending the pair as low as the 100-hour and 100-period (4H) SMAs near 1.3390. At the same time, the pair also reached a new two-week high of 1.3465 prior to this fall. The remainder of the day was very calm, as volatility eased due to the monthly PP and the 55-hour SMA being located nearby.Technical indicators flash bearish signals for this session. In case this 55-hour moving average is breached and the pair does go lower, the it faces two strong support levels at 1.3375 and 1.3340. In terms of resistance, the 200-period (4H) SMA and the 61.80% Fibo are located at 1.3550.
Hourly chart
The Sterling has plunged 7.28% against the US Dollar since mid-April. Despite lingering near the 200-day SMA for a couple of days, downside risks prevailed and pushed the rate as low as the 1.3245 last week.
As apparent on the chart, the Pound has started to recover from its six-month low. This appreciation is expected to continue during the following two weeks, as well. The nearest significant resistance is the 50.00% Fibonacci retracement and the 200-day SMA at 1.35 and 1.36, respectively.
Daily Chart
The SWFX market sentiment is 63% bullish today. Likewise, 55% of pending orders are to buy the Pound.
The market sentiment of OANDA traders is strongly bullish, as 69% of them are holding long positions (+1%). Saxo Bank clients are likewise bullish with 59% long positions (-1%).
Spreads (avg, pip) / Trading volume / Volatility