Pound falls below 1.56

Note: This section contains information in English only.
Source: Dukascopy Bank SA
"Pending orders in 100-pip range are strongly bearish with 67% of them set to sell. Therefore, a decrease in value is likely, the closest support is placed at 1.5518 and it is represented by weekly S1. Meanwhile, an advance remains a possibility, while for that purpose the closest resistance is the weekly pivot point and 55-day SMA that are located at 1.5641"

© Dukascopy Bank SA
There was a possibility for the pair to set weekly gains; however, on Friday the strong non-farm employment claims made some corrections that impacted the US Dollar positively. The pair slipped 0.54% on Friday with a big possibility of prolonging the decline on Monday (today). As of today, no major data are expected, thus the market will be driven by Friday's data and the technical studies.

Hiring in the world's number one economy accelerated, as American employers added the biggest number of workers in almost three years in October, the Bureau of Labor Statistics said, which could potentially bring the Fed closer to raising its interest rates. Non-farm payrolls soared by 321,000, the most since January 2012, while the unemployment rate remained unchanged at 5.8%. Data for September and October were revised to show 44,000 more jobs added than previously reported. November marked the 10th consecutive month that employment growth exceeded 200,000, the longest streak since 1994, and confirmed the US economy is withstanding slowdowns in China and the Euro zone, as well as a recession in Japan.

Meanwhile,The UK public have eased its short and medium-term inflation expectations as price pressures remain weak due to both external and internal factors. Britons now see consumer prices rising 2.5% over the next twelve months, down from 2.8% in August. Expectations for 2016 also declined to 2.5% from 2.8% measured previously, the Bank of England/GfK NOP Inflation Attitudes Survey for November revealed. Inflation expectations stay well anchored, due to the fact that both external and internal price pressures remain sluggish.






No major headwinds expected

After the very important last week, when the US non-farm payrolls were released on Friday and other high importance data both from UK and US, this seems to be calmer week. We do not expect a turbulent trading today due to lack of data.
© Dukascopy Bank SA

GBP/USD on a gradual down-trend

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's trading range is becoming narrower and that could potentially provoke a break-out. Since the Pound has reached this year's low just recently, we expect a bullish break-out to be the case; however, there still is a downside risk of the pair falling lower, if it fails to breach the monthly R1 at 1.5921.

Daily chart
© Dukascopy Bank SA

The strength of the upper trend-line and the major level at 1.57 dragged the pair below the 1.56 mark for the first time this year. Shortly the Pound/Dollar cross will face the weekly and monthly S1s at 1.5518/1.5484. The technical indicators remain mixed, thereby not helping to evaluate the next movements. Nonetheless, the pair remains bearish for now.

Hourly chart
© Dukascopy Bank SA

GBP/USD spreads (avg, pip) and volatility

© Dukascopy Bank SA








GBP/USD sentiment stays slightly bullish

The SWFX traders are getting less and less convinced that the Pound is going to gain relative to the U.S. Dollar; but overall the bulls are still in a slight majority, as they take up 55% of the market, and this is a advantage over the bears (45%). In the meantime, the share of sell orders grew from 66% up to 67%. It proclaims that, if the pair appreciates, in the medium-term it may be stopped by the weekly PP and down-trend's resistance line and is likely to be pushed to the downside by this substantial resistance level. Although, in case the pair retreats the bearish pressure may become even stronger in the foreseeable future.

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