After another day the Sterling skyrocketed against most major peers, amid surprise EU referendum polls showing that the majority is voting for the ‘Bremain' camp. The Sterling appreciated the most against commodity currencies, as a stronger US Dollar drove the oil prices lower yesterday. The Pound added 2.27% against the Aussie, 2.00% versus the Kiwi and 1.91% against the Loonie. The GBP/JPY also surged 1.91%, while a 1.85% was registered against the European single currency. Since the FOMC Meeting Minutes boosted the American Dollar, the Cable gained the least, namely 0.94%.
The unemployment rate in the UK remained unchanged at a decade-low for the fifth straight month in March, though the claimant count unexpectedly declined and average earnings presented a mixed picture in comparison with forecasts. The number of people in work rose by 44,000 to 31.6 million in the three months to March compared to the previous three-month period, with increases in both full- and part-time work and the number of self-employed. Furthermore, the Office for National Statistics reported that unemployment fell by 2,000, to 1.7 million with the jobless rate holding steady at 5.1%. Data showed that the unemployment rate was last lower in 2005. Moreover, a separate research showed that the claimant count fell by a seasonally adjusted 2,400 in April, compared to expectations for a increase of 4,300 people, and following an advance of 14,700 a month earlier, when the figure was revised from a previously reported gain of 6.700. The upward revision in the claimant count was the biggest monthly rise since September 2011.
Meanwhile, the average earnings index, including bonuses, rose by a seasonally adjusted 2.0% in the three months to March, above forecasts for a 1.7% increase and after rising by a revised 1.8% in the three months to February.
UK Retail Sales, Philly Fed Manufacturing Index and the US Jobless Claims
GBP/USD struggles to reclaim 1.46
Still being driven by political factors, namely the upcoming EU referendum, the Sterling managed to advance more than 130 pips against the US Dollar yesterday. The weekly R2 succeeded in limiting the gains just on top of the 1.46 major level, which could cause the Cable to undergo a corrective decline. In this case the 20-day SMA and the weekly R1 cluster will be the key support. Technical studies are in favour of the bearish outcome, but a possibility of the GBP/USD currency pair soaring in the wake of positive political or fundamental news exists, which would lead the exchange rate towards the resistance circa 1.4670, namely the Bollinger band and the weekly R3.
Daily chart
Hourly chart
Bears now in the majority
Bears are now in the majority, taking up 53% of the market (previously 48%), whereas the share of purchase orders edged up from 45 to 66%.
At OANDA market sentiment worsened over the day, as 51% of their open positions are now long, compared to 56% on Wednesday. Meanwhile, the sentiment at SAXO Bank remained unchanged, as bears still take up 56% of the market.
Spreads (avg, pip) / Trading volume / Volatility
Majority sees GBP/USD below 1.46 in three months