- 55% of pending orders in the 100-pip range are to SELL
- 51% of traders are bullish on the Sterling
- Strong support area circa 1.3572
- Upcoming events: US Average Hourly Earnings m/m, US Non-Farm Employment Change, US Unemployment Rate, US ISM Non-Manufacturing PMI, FOMC Member Mester to speak
The Sterling ignored the UK services PMI report, with the GBP/USD currency pair revealing a little initial reaction just after data came in.
Activity in Britain's services sector rose unexpectedly quickly in December, while businesses were more optimistic about the outlook, despite Brexit lingering weigh on investment plans. The Markit/CIPS indicated that the country's services PMI increased to 54.2 in the observed month, the second-strongest rate since April. Along with manufacturing and construction surveys released this week, the economy is expected to reveal up to 0.5% growth in the last quarter of 2017. Meanwhile, consumer spending remained affected by price overheating caused by Brexit vote and weak pay growth.
Day for US fundamentals
Friday's trading session is allocated entirely to fundamentals from the United States. The Bureau of Labour Statistics is to release Average Hourly Earnings, Non-Farm Employment Change and Unemployment Rate for December at 1330GMT.
In addition, the Institute for Supply Management will publish its Non-Manufacturing PMI for the same month at 1500GMT.
Finally, the President of the Federal Reserve Bank of Cleveland Loretta Mester is due to participate in a panel discussion ‘Coordinating Conventional and Unconventional monetary Policies for Macroeconomic Stability' at 1730GMT.
GBP/USD continues to rise along 100-hour SMA
Although the ADP released some positive information on employment change yesterday, the Dollar continued to lose value against the Sterling. The surge was mainly driven by the 100-hour SMA, which together with the 55-hour SMA is expected to continue providing support for the pair.
As norther side is barrier-free, the cable is expected to spend first half of this trading session tending to reach the weekly R1. An existence of one junior and one medium ascending channels supports the further advance of the Pound. However, whether the pair will manage to bypass the monthly R1 or not will greatly depend on today's release of the American labour market data.
In the meantime, there is a need to take into account that majority of pending orders both in 50- and 100-pip range are set to sell.
Hourly chart
The Sterling continues to trade between the weekly and monthly PPs and R1s. Given the strength of both barriers, this area is expected to hold today. The general direction of the pair should nevertheless be tended southwards.
Daily chart
The SWFX sentiment has turned bullish in this session, as 51% of traders are holding long positions (+1%). In addition, 53% of pending orders are to buy the Sterling (-1%).
OANDA traders are bearish today with 56% short positions (+1%). Saxo Bank clients share the same sentiment with 62% short positions for the second consecutive session.
Spreads (avg, pip) / Trading volume / Volatility