- Pending orders in 100-pip range from the current market price dipped to the negative side (37% bullish / 63% bearish)
- The pair could fall in value, with the closest support at 1.5586 (weekly S1)
- An advance is also a possibility, but it should be limited by the weekly PP at 1.5672
- Upcoming events: UK Public Sector Net Borrowing, UK CBI Realized Sales
Britain's retail sales surged above estimates on month in November, while year-on-year sales rose at the fastest pace in 10 years as US-style Black Friday bolstered sales of electrical appliances and household goods. Volumes sold by UK retailers soared at an annual 6.4% pace, according to the Office for National Statistics, the biggest increase since May 2004, marking 20 straight months of growth. Compared with October, sales rose 1.6% in November. Economists had forecasted retail sales to edge up 0.3% on month following a similar increase in November, and for sales to be 4.4% higher on year. US-style discounts for Black Friday took off in Britain this year, with stores experiencing record sales.
At the mean time, the number of Americans seeking first-time unemployment benefits declined last week and remained near the lowest level in 14 years, the latest sign of strengthening labour market. Jobless claims fell by 6,000 to 289,000 in the week ended December 13, the fewest since early November, a Labor Department report showed. New applications for unemployment benefits have stayed below the 300,000 threshold in 13 of the past 14 weeks, the longest such streak since the first half of 2000. The four-week moving average, which irons out volatile weekly data, declined by 750 to 298,750. Meanwhile, companies continue to hire more workers and job creation is set for the best year since 1999. The American economy added a seasonally adjusted 321,000 new jobs in November, a separate report showed earlier this month, while the jobless rate was at 5.8%. The Fed officials now expect the jobless rate will decline to 5.2% or 5.3% in 2015, putting the unemployment rate in a zone policy makers consider "full employment".
UK's public sector net barrowing and CBI realized sales today
If yesterday was a day with many releases then today is much calmer with only few medium importance out of UK - public sector new borrowing and CBI realized sales. Moreover, this is one of the few days when there are no releases from US.
GBP/USD bounces towards weekly PP
Already for more than a month GBP/USD is testing the strength of the down-trend, especially its upper trend-line, that started to take its shape on July, when the pair reached a six-year high at 1.7193. The pair has returned to trade inside the boundaries of the down-trend, after breaching it to the upside. The pair is hovering around the lower levels this year, namely around 1.1550 and there still is a downside risk of the pair falling lower, since it is back on its down-trend.Daily chart
Since the last time of writing the pair has managed to reverse the sharp drop that took place late on Wednesday and currently it is hovering around the weekly PP at 1.5672. In case the pair wants to prolong its appreciation then it will have to surpass the monthly PP at 1.5755 that does not seem very likely. To our mind the bias remains negative, with the target at 1.5542.
Hourly chart
Bullish positions increase, while pending orders set to sell
Concerning the orders, the share of the sell orders has managed to edge up from 58% to 63%. It proclaims that, if the pair appreciates, in the near-term it may be stopped by the monthly PP and is likely to be pushed to the downside by this substantial resistance level.
Although, in case the pair returns to trade in the boundaries of the down-trend then the bearish pressure may become even stronger in the foreseeable future.
Spreads (avg,pip) / Trading volume / Volatility
Community expects Pound slide lower
Jignesh, one of the community members participating in the survey, sees the pair depreciating towards the 1.55 mark "GBP/USD has faced rejection off a downwards trend line on the 1H and continues it's bearish momentum. 1.5500 should offer decent support for the pair". However, he adds that "Wednesday's FOMC will be a big driver for the USD".
Meanwhile, traders, who were asked regarding their longer-term views on GBP/USD between Nov 11 and Dec 11 expect, on average, to see the currency pair at 1.5721 by the mid-March. Though the largest portion of participants, namely 17% of them, believe the exchange rate will rebound to the 1.60/1.62 region in sixty days. Additionally, 45% of the market participants see the pair falling below the 1.56 mark.