- 54% of pending orders in the 100-pip range are to BUY
- 63% of traders are bullish on the Pound (+6%)
- Significant resistance is located circa 1.3250
- Upcoming events: UK Manufacturing Production m/m, UK Goods Trade Balance, FOMC Members Kashkari and Kaplan to speak
The Labour Department showed that the US job market faced unexpected decrease in jobs, as the economy lost 33K positions in September, reflecting the impact of Hurricanes Harvey and Irma.
However, the unemployment rate declined to a new low of 4.2% in the same period. Following the report, market expectations for the Federal Reserve to raise rates in December were still high.
FOMC Members to speak
Tuesday's trading session will start with monthly British Manufacturing Production and Goods Trade Balance released at 0830GMT.
Meanwhile, two members of the Federal Open Market Committee are to speak during the following 24 hours, namely, the President of the Federal Reserve Bank of Minneapolis Neel Kashkari is to deliver opening remarks at the Regional Economic Conditions Conference at 1400GMT, while the President of the Federal Serve Bank of Dallas Robert Kaplan will deliver a speech about the economic outlook at the Stanford Institute for Economic Policy Research at 0000GMT.
GBP/USD tries to get back to 1.32
In result of the previous trading session, the Pound managed to break through a combined resistance level formed by the 55-hour SMA and the upper edge of a descending channel that was additionally backed up by the 38.2% Fibonacci retracement level.
During the surge, the pair has formed a junior ascending channel that together with the bullish market sentiment is likely to elevate the pair to the 1.3200 or even 1.3250 levels. However, in order to reach these targets the Pound needs a release of better than expected data about the UK manufacturing activity.
In larger perspective, there is a need to take into account that the pair is moving in a general downtrend that is continuously fuelled by ineffectual Brexit talks.
Hourly chart
Bulls managed to take the upper hand on Monday, thus pushing GBP/USD past the 55-hour SMA. The rate has maintained this sentiment in this session, as well, as the Pound was demonstrating willingness to surpass the weekly PP at 1.3167 on Tuesday morning.
In case this level is not surpassed, traders might expect a subsequent weakening of the rate down to the lower boundary of the junior channel.
Daily chart
Bullish market sentiment strengthens
SWFX market sentiment is increasingly bullish on Tuesday, as the number of long positions is 63% (+6%). In addition, 53% of pending orders are to buy the Pound (+1%).
OANDA traders have turned bullish on the Pound, as 53% of open positions are long (+2%). Meanwhile, traders at Saxo Bank are still bearish with 57% short positions (unchanged from Monday).