- 57% of all pending orders are to buy the Pound
- 55% of all open positions are long
- Gains should be capped around 1.2780
- Significant support rests circa 1.2720
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Upcoming Events: US Core Durable Goods Orders m/m, Durable Goods Orders m/m
The number of Americans filing for unemployment benefits rose slightly last week, official figures revealed on Thursday. The US Department of Labour reported that initial jobless claims rose to 241K in the week ended June 16, following the preceding week's upwardly revised 238K but meeting market analysts' expectations. Initial claims remained below the 300K level for the 120th week, the longest streak since 1973. The four-week moving average of initial jobless claims climbed 1.5K to 244,750 last week, the highest level since April.
Apart from that, Thursday's data also showed that the number of people continuing to receive jobless benefits rose 8K to 1.94M in the week ended June 10. Continuous claims remained below the 2M level for 10 consecutive weeks, pointing to the strong labour market trends. According to some analysts, the US labour market is at or close to full employment, with the unemployment rate at a 16-year low of 4.3%. If the jobs market continues to perform strong, the Fed will likely speed up interest rate hikes. However, to make the next rate hike policymakers will also focus their attention on inflation growth.
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US to release Core Durable Goods m/m
The most significant fundamental events for this trading session is a set of data on US Durable Goods Orders at 1230 GMT of which the greatest importance is put on Core Durable Goods Orders, as they might shake the market considerably.
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GBP/USD tests monthly S1 at 1.2758
Despite being tied down by bearish technical indicators, GBP/USD managed to push through a descending trend-line and the 200-hour SMA. The combined support of the given SMA and the 23.6% Fibo did provide strong support for the Pound, restricting its move below the 1.2720 mark. During the first hours of this session, the pair has demonstrated reluctance to move above the monthly S1; however, indicators suggest that there is still some upside potential. The pair has been trading in a channel down for the last two weeks and has approached the upper channel boundary. Thus, it may be hindered or even reversed by the 38.2% Fibo at 1.2770. Meanwhile, the US is to release m/m durable goods orders at 1230 GMT that may provide downward pressure on the pair.
Hourly chart
An immediate resistance on the daily chart is provided by the monthly S1 at 1.2758 that could cap the pair's gains in this session. In case this level is breached, the next resistance is formed by the 20-day SMA at 1.2796. On the contrary, no support is restricting the pair from the downside until the 23.6% Fibonacci retracement at 1.2673.Daily chart
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Sentiment points to different directions
SWFX traders are bullish on the Pound, as 55% of all open positions are long. Meanwhile, 57% of set up orders are to buy the British Pound.
Traders at Saxo Bank support this bullish sentiment, with 60% of traders holding long positions. On the contrary, OANDA has increased its bearish sentiment, as the same amount of traders (60%) is holding short positions.
Spreads (avg, pip) / Trading volume / Volatility
Traders predict further weakness
© Dukascopy Bank SATraders believe that the Cable is to fall below the 1.28 mark three months from now, as 52% of survey participants share this belief. The current price is around 1.2754, while the average forecast for September 26 is 1.2819. The 1.24-1.26 range still remains as the most popular price interval, having 19% of the votes. However, the price prediction for the 1.32/34 range has increased to 16%, thus being characterised as the second most frequent answer.