- 51% of pending orders in the 100-pip range are to BUY
- 57% of traders are bullish on the Pound (-3%)
- Nearest support lies near 1.3210
- Upcoming events: US Unemployment Claims, US Trade Balance, US Factory Orders m/m, FOMC Members Powell and Harker and MPC Members McCafferty and Haldane to speak
The British Pound strengthened against the Greenback on the grounds of shiny UK service industry data. Following the report, the GBP/USD currency pair jumped 22 base points to the 1.3278. However, by the end of the session the pair returned to the prior lows near the 1.3230 area, confirming that the sentiment concerning the Sterling's outlook stayed more downbeat amid lingering uncertainties over Brexit talks.
Markit report showed that the Britain's services sector grew at a stronger-than-anticipated pace in September, putting the industry's PMI to a seasonally adjusted 53.6, above forecasts for an unchanged reading. The strong data could ease concerns over the UK economy and support expectations for the Bank of England's interest rate hike.
Various central bankers set to speak in this session
The main fundamental events are to occur during the second half of this trading session. The US will publish weekly Unemployment Claims and monthly Trade Balance at 1230GMT. There is another set of data planned for this session, namely the US Factory Orders at 1400GMT.
The rest of fundamental events are speeches by central bankers from both the US and the UK. The Federal Reserve Governor Jerome Powell and the President of the Federal Bank of Philadelphia Patrick Harker are to speak at 1310GMT and 1400GMT, respectively. Meanwhile, two members of the British Monetary Policy Committee – Ian McCafferty and the BOE Chief Economist Andy Haldane – will participate in two separate events at 1600GMT and 1730GMT, respectively.
GBP/USD trades around 55-hour SMA
The British Pound is continuing to trade lose value against the American Dollar in a one-month-long descending channel. Despite a bunch of important macroeconomic data releases, the pair did not make any substantial advances yesterday.
One of the reasons for that was the 55-hour SMA, which traders continuously used as a support and resistance. As a result, the pair ended previous trading session in the centre of the channel.
Because of the bullish sentiment, traders are likely to try to push the rate to the upper edge of the pattern. However, the above 55-hour SMA once again might turnaround the pair and force it to slip to the weekly S1, which is located at the 1.3210.
Hourly chart
The Pound did not provide any surprises on Wednesday, as the rate continued to trade between the weekly S1 and S2. Bears, however, prevailed on Thursday morning and thus managed to push the pair below the latter. The nearest support is set by the 38.2% Fibonacci retracement and the 55-day SMA circa 1.3140.
Daily chart
Market sentiment at balance
SWFX market sentiment is bullish on Thursday, as the number of long positions is 57%, compared to 60% on Wednesday. In addition, 57% of pending orders are to buy the Pound (+1%).
Meanwhile, OANDA traders remain bearish on the Pound, as 54% of open positions are short (+1%). Traders at Saxo Bank are likewise bearish with 64% short positions (+1%).