- 61% of pending orders in the 100-pip range are to BUY the Sterling
- SWFX market sentiment is 63% bullish (+3%)
- Upcoming fundamental events: ECB Forum with Draghi, Lowe, Kuroda and Powell speaking, US Current Account and Existing Home Sales
Technical signals point to soon recovery of the GBP/USD exchange rate.
The Greenback strengthened against the European single currency, following the US Building data release on Tuesday. The EUR/USD currency pair lost two pips, or 0.02%, to continue fluctuating in the 1.5596 area.
The Census Bureau released Residential Building Permits data that came lower-than-expected with a forecast of 1.35M in May, and lower from the previous period.
A survey showed that builders are: "..increasingly concerned that tariffs placed on Canadian lumber and other imported productsare hurting housing affordability."
ECB Forum
The main fundamental event in this session is a panel discussion at the ECB Forum on Central Banking which will include the following speakers: the RBA Governor Philip Lowe, the ECB President Mario Draghi, the BOJ Governor Haruhiko Kuroda and the Fed Chief Jerome Powell. This session will start at 1330GMT.
Meanwhile, some minor data from the United States are likewise released today, namely, the quarterly Current Account and the monthly Existing Home Sales at 1230GMT and 1400GMT, respectively.
GBP/USD approaches channel line
Despite flashing bullish signals early on Wednesday, the narrow range between the 55-hour SMA and a historic resistance/support level at 1.3232 was breached to the downside. This move extended the Pound's losses against the US Dollar to the third consecutive session.The pair is trading near the bottom boundary of a six-week descending channel at 1.3125. Thus, it is likely that bears still manage to push the rate lower to 1.31 today. However, bulls are expected to lead the pair for the following 24 hours and even longer.
This is supported by converging technical indicators and the current sideways movement which shows that the strong bearish sentiment has eased considerably. Upside potential is apparent until the 55-hour SMA at 1.3232.
Hourly chart
The Sterling has plunged 7.28% against the US Dollar since mid-April. Despite edging higher last week, bears managed to regain dominance in the market and push the rate down to 1.3255 this morning.
The pair is expected to strengthen next week, setting the 200-day SMA and the monthly R1 at 1.3650 as a mid-July target.
Daily Chart
The SWFX market sentiment has strengthened today and stands at 63% bullish positions (+3%). Meanwhile, 51% of pending orders are to sell the Pound.
The market sentiment of OANDA is strongly bullish, as 62% of its traders are holding long positions (-4%). Saxo Bank clients are likewise bullish with 60% long positions.
Spreads (avg, pip) / Trading volume / Volatility