The number of unemployment benefit claims in Britain rose less than expected last month, while the unemployment rate held steady. Official data published by Office for National Statistics on Wednesday showed claims for unemployment aid advanced 2,400 in November, while markets anticipated a gain of 6,200. The October figure was revised up to 13,300, the highest since February 2015, from the originally reported 9,800. In the meantime, the unemployment rate remained unchanged at its 11-year low of 4.8% as fewer teenagers and homemakers entered the labor market. That was in line with analysts' expectations. Nevertheless, the number of employed people dropped 6,000 to 31.8 million after hitting its record high in October. That marked the first fall since the three months to June 2015. The ONS also reported the Average Earnings Index jumped 2.5% year-over-year in the August-October period. Excluding bonuses, earnings increased 2.6%, the largest gain since mid-2015.
The UK economy performed far better than expected after the country's decision to leave the European Union; however, analysts still expect the economy to slow down sharply next year.
Another busy day
GBP/USD risks piercing wedge's support line
The GBP/USD currency pair underwent the anticipated decline on Wednesday, but with the broadening rising wedge's support line remaining intact. The trend-line was confirmed, but is still under the risk of getting breached today, as a number of fundamental events could trigger Pound-selling. The trend-line is also weaker today, as it is now reinforced only by the 20-day SMA, rather than the weekly S1, the monthly and the 55-day SMA as yesterday. As a result, the Cable risks falling back under 1.25, despite technical indicators retaining bullish signals. On the other hand, yesterday's losses could be completely erased should the fundamental data turn in Sterling's favour.
Daily chart
Hourly chart
Traders mostly bullish
Today 60% of all open positions are long (previously 59%), while the share of sell orders returned to its Monday's level of 60%.
A similar situation is observed elsewhere. For example, 57% of positions open at OANDA are currently long. This is more than the share of shorts (43%), more than sufficient for the sentiment to be called bullish. Similarly, sentiment at Saxo Bank is also bullish, with 57% of traders being long and 43% 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 March 15 is 1.2562. Furthermore, the 1.28-1.30 interval is now the most popular one, having 14% of the votes. On the second place in terms of the votes is the 1.30-1.32 (12%) interval, followed also by the 1.18-1.20 and 1.32-1.34 intervals, both with only 11% of the votes. Moreover, 62% all survey participants believe the Cable is to fall above 1.24.