- There are 57% of orders to buy the Pound
- Bulls take up 57% of the market
- The 20 and 55-day SMAs, the weekly and the monthly PPs form support around 1.4240
- Resistance is at 1.4339, represented by the weekly R1
- 56% of traders reckon GBP/USD will be at 1.44 or lower in three months
- Upcoming events: UK Retail Sales, UK Public Sector Net Borrowing, US Philadelphia Fed Manufacturing Index, US Jobless Claims, US HPI, BoE Governor Carney Speech, US CB Leading Index, US Natural Gas Storage
The British Pound experienced mixed performance over the day, having slumped against some major peers, but also appreciated against the others. Poor UK labour data caused the Sterling to fall 0.58% against the Loonie, 0.46% versus the US Dollar and 0.19% and the Aussie. However, the Pound managed to gain 0.49% against one of the commodity currencies, namely the Kiwi, also adding 0.60% versus the Swiss Franc. At the same time, the British currency remained relatively unchanged against the safe-haven Yen and against the Euro, surging 0.12% and 0.08%, respectively.
The jobless total in the UK increased for the first time in almost a year. The UK unemployment rose by 21,000 to 1.7 million between December and February, and that was the first increase since the May-July period of the last year, the Office for National Statistics reported. The number of people claiming unemployment-related benefits increased by 6,700 in March to 732,100, the first monthly rise since last August. Meanwhile, the unemployment rate remained at anticipated 5.1%, which is still down by 0.5% on a year ago and the lowest since 2005.
Other data from the ONS showed that the number of self-employed workers increased by 120,000 to a near record 4.6 million, while people on government training and employment programmes fell by 9,000 to 102,000. Data also showed that there were 14.6 million women in work, down by 40,000 on the previous three months and the first fall since the autumn of 2012. The quarterly reduction in women's employment was the biggest for five years. In contrast, male employment was almost 16.8 million, the highest since records began in 1971. The ONS assume that while it is too soon to be certain but, with the jobless up for the first time since mid-2015, and employment facing its slowest rise, it is possible that recent developments in the job market may be easing off.
UK Retail Sales, US Jobless Claims and the Philadelphia Fed Manufacturing Index
Today one of the most important economic data releases are the UK Retail Sales. The Retail Sales are released by the Office for National Statistics and measure the total receipts of retail stores. Monthly changes reflect the rate of changes of such sales. Changes in Retail Sales are widely followed as an indicator of consumer spending. Another event concerns the US economy, namely the Philadelphia Fed Manufacturing Index. It is a spread index of manufacturing conditions within the Federal Reserve Bank of Philadelphia. This survey, served as an indicator of manufacturing sector trends, is interrelated with the ISM manufacturing index and the index of industrial production. It is also used as a forecast of the ISM Index. Finally, the US Jobless Claims, which are released by the US Department of Labor, and are a measure of the number of people filing first-time claims for state unemployment insurance. In other words, it provides a measure of strength in the labour market. A larger than expected number indicates weakness in this market, which influences the strength and direction of the US economy.
GBP/USD takes another shot at retaking 1.44
The Cable dropped slightly under the weekly R1 on Wednesday, confirming the bearish scenario. Today's technical indicators retain mixed signals, also unable to give a clear sense of direction. In case bears push the GBP/USD currency pair lower, losses are likely to be limited by the tough support cluster around 1.4240, represented by the 20 and 55-day SMAs, as well as the weekly and the monthly PPs. On the other hand, despite the Sterling's overall bearish trend, there is still room for a rally towards the resistance area around 1.4450, with the next target being a larger scale down-trend, where price is eventually expected to bounce back.
Daily chart
The GBP/USD pair appears to be experiencing a small setback on its path towards the resistance trend-line near the 1.45 major level. Even if the bearish momentum continues to prevail, the 200-hour SMA around 1.4250 is likely to provide support.
Hourly chart
Sentiment remains bullish
As of right now, relative difference between longs and shorts and buy and sell orders is the same - plus 14%.
At OANDA market sentiment is now close to equilibrium, with only 51% of their open positions being long, unchanged since Wednesday. Meanwhile, the sentiment at SAXO Bank remains bearish, with 57% of their traders still holding short positions.
Spreads (avg, pip) / Trading volume / Volatility
Majority sees GBP/USD below 1.44 in three months
The majority of traders (56%) believe the British currency is to cost 1.44 or less dollars after a three-month period. The most popular price interval was selected by 19% of the voters, namely the 1.44-1.46 one, while the second most popular choice implies that the Sterling is to cost between 1.46 and 1.48 dollars in three months, chosen by 15% of the surveyed. At the same time, the mean forecast for July 21 is 1.4208.
Following rather negative development of the pair during April 11-15 week, participants of our weekly Community Forecasts quiz decided to become much more bearish on the Cable, as currently only 27% of them support movement to the north in course of this week.
Among the lesser part of the traders, namely the ones retaining a positive outlook towards the Cable, MR_KHALEDBADRY only commented that he expects the Sterling to increase in value, without backing his view.
Meanwhile, another active member of the Dukascopy Community, Jignesh, said that "the GBP/USD has now failed three times in making a higher high and on the 4H chart, the technical clearly point to a bearish trend." He also added that the 1.4050 remains to be a strong support which may prop up the pair, but a likely move this week is for the pair to test its lower bounds in the 1.3900 range..