- The share of sell orders fell to 55%
- Market sentiment remains bullish at 62%
- Immediate resistance is around 1.2569
- The closest support is at 1.24
- Upcoming events: UK Construction Output, FOMC Member Fischer's Speech, Preliminary UoM Consumer Sentiment
The number of Americans filing for unemployment aid dropped more than expect last week, official figures showed on Thursday. According to the US Department of Labor, initial jobless claims fell 11,000 to 254,000 in the week ended November 4, down from the preceding week's 267,000 filings, while market analysts anticipated an increase of 2,000 to 267,000. This marked the 88th week of initial claims below the 300,000 level, the longest streak since 1973. The four-week moving average of claims increased 1,750 to 259,750 in the reported week. Thursday's data also showed that continuing claims grew 18,000 to 2,041,000 in the week ending October 29, whereas their four-week moving average declined to 2,039,500, the lowest level since July of 2000. After the release, the EUR/USD pair fell 0.09% to 1.0902, whereas it touched its highest level of 1.1298 on Wednesday after the results of the presidential race were announced.
Last week's initial jobless claims together with the NFP report released on Friday have strengthened odds for a December rate hike, despite Donald Trump's surprise victory in the US Presidential elections, which sent shockwaves across the world.
No significant fundamental data until Tuesday
Final weekday after the US election and there are no significant events that could have a solid impact on the GBP/USD pair's performance today. Monday is also going to be a quiet day, but on Tuesday traders can focus on the UK CPI data and the US Retail and Core Retail Sales figures.
GBP/USD attempts to reclaim the 1.26 level
The GBP/USD currency pair overperformed on Thursday, as it breached the 1.25 major level and established a new four-week high yesterday. The Pound still faces the upper Bollinger band today, but according to technical indicators the pair is to keep edging higher today. Ultimately, the Cable could easily retake the 1.26 major level, with focus shifting to the next strong resistance area around the 1.27 mark, represented by the weekly R1, the 23.60% Fibo and the 55-day SMA. However, in case of the bearish outcome the 1.24 mark is expected to remain intact, as demand around that psychological level is sufficient to limit the losses.
Daily chart
The British currency put the up-trend to the test yesterday, which provided a significant boost, allowing the pair to edge closer to the 1.26 mark today. Even if the bears prevail today the trend-line is expected to keep the pair elevated, as it the 200-hour SMA is bolstering the given up-trend.
Hourly chart
Traders mostly bullish
Although not as strong as yesterday, but market sentiment remains bullish at 62% (previously 65%). At the same time, the share of sell orders lost five percentage points, having fallen to a total of 55%.
A similar situation is observed elsewhere. For example, 62% of positions open at OANDA are currently long. This is more than the share of shorts (38%), more than sufficient for the sentiment to be called bullish. Similarly, sentiment at Saxo Bank is also bullish, with 56% of traders being long and 44% being short the Sterling against the US Dollar.
Spreads (avg, pip) / Trading volume / Volatility
Traders expect no major changes
By the end of the next three months traders expect the Cable to be higher than the level where it is now. While the current price is around 1.24, the average forecast for November 10 is 1.2165. Furthermore, the 1.18-1.20 interval is now the most popular one, having 19% of the votes. On the second place in terms of the votes is the 1.16-1.18 (16%) interval, followed also by the 1.14-1.16 and the 1.20-1.22 intervals with only 10% of the votes each. Moreover, 73% all survey participants believe the Cable is to fall under 1.26.