- 53% of pending orders in the 100-pip range are to BUY the Sterling
- SWFX market sentiment is 64% bullish (+1%)
- Upcoming fundamental events: British Manufacturing Production m/m and Goods Trade Balance
The Sterling found support at the 100-hour SMA early 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.
UK Manufacturing Production PMI
The UK Office for National Statistics is set to release the Manufacturing Production for April at 0830GMT. The British Goods Trade Balance is published at the same time.
There are no important data releases from the United States. One event that traders could look out for is the US 10-y Bond Auction at 1701GMT which might gauge investor confidence on future interest rates could move in the future.
GBP/USD points to decline
Despite some volatility throughout the day, the GBP/USD exchange rate remained stable during Friday's trading session. From above, it was restricted by the monthly PP at 1.3427, while a fall below the 1.3360 level was stopped by the 100-period (4H) SMA. In general, the pair has maintained its tendency north in an ascending channel during the following two weeks.Technical signals suggest that the Sterling could re-test this 100-period and 200-hour SMAs near 1.3360 today. The bottom channel line is likewise located there.
The general bullish tendency suggests that this level might mark a reversal to the upside within the aforementioned channel. In case the 55-hour SMA is breached, daily gains should be capped near the weekly R1 and the 200-period (4H) SMA at 1.3490.
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 64% bullish today (+1%). Likewise, 55% of pending orders are to buy the Pound.
The market sentiment of OANDA is strongly bullish, as 68% of its traders are holding long positions (-1%). Saxo Bank clients are likewise bullish with 59% long positions.
Spreads (avg, pip) / Trading volume / Volatility