In the last day or so to close out last week, the GBP/USD has eased off a little and established a trading range in between 1.51 and 1.52 after it takes a breather from its excitement from last week. Last week it experienced a strong surge higher moving back to within reach of the 1.52 level before easing off a little and then rallying a off support at 1.5080. Earlier last week it did well to climb off the canvas and move back above 1.49 and towards 1.50 again before seeing the pound reverse and head back down below 1.49 to reach a new multi-year low near 1.48. A couple of weeks ago it experienced sharp falls moving from 1.53 down to the key long term level of 1.50 and then through 1.49. This recent movement saw it resume its already well established medium term down trend from the last few weeks and move it to a four month low.
Over the last few weeks, it has moved back from above 1.57 and fallen strongly. Throughout the first half of June, it enjoyed its best run in a long time as it surged from 1.50 to 1.57 in just a few weeks. Its multiple key levels during its movement up towards 1.57 have appeared to have little impact during its recent decline, although 1.52 seemed to halt the decline a little a couple of weeks ago. This level has resurfaced again and provided further resistance after the pound’s surge higher last week. With the exception of last week’s surge higher, the pound has completely reversed its fortunes from the strong first half of June which saw it climb so strongly from 1.50 up to the four month highs above 1.57. Throughout the month of May the pound fell strongly and return almost all of its gains from the few weeks before that. In early March the pound moved to new lows around 1.4830 from a starting point near 1.64 at the beginning of the year.
U.K. Government hopes of a construction revival were dashed in May after output stayed flat compared with the previous month. A slump in recent months means output in May is almost 5% below where it was in the same month in 2012, said the Office for National Statistics. The lacklustre performance of the sector, which accounts for around 6% of national output, will temper expectations that the UK’s economic growth picked up speed during the spring. The ONS blamed bad weather and the two bank holidays in May this year compared with only one last year. But it also highlighted “subdued underlying demand” for the sector’s woes. Construction has traditionally driven previous recoveries as commercial and retail projects combined with housebuilding to spur GDP growth and employment. 
GBP/USD July 15 at 01:15 GMT 1.5107 H: 1.5130 L: 1.5097
During the early hours of the Asian trading session on Monday, the GBP/USD is consolidating within a narrow trading range sitting right above the support at 1.51. Since the middle of June the pound has fallen very strongly from the resistance level at 1.57 back down towards the long term key level at 1.50. Current range: Right around 1.5100.
Further levels in both directions:
• Below: 1.5100 and 1.4850.
• Above: 1.5200.
(Shows the ratio of long vs. short positions held for the GBP/USD among all OANDA clients. The left percentage (blue) shows long positions; the right percentage (orange) shows short positions.)
The GBP/USD long positions ratio has just eased back under 60% as the GBP/USD has eased off and moved to within a range above 1.51. Trader sentiment remains in favour of long positions.
Economic Releases
- 01:30 AU New motor vehicle sales (Jun)
- 12:30 US Empire State Survey (Jul)
- 12:30 US Retail Sales (Jun)
- 14:00 US Business inventories (May)