- 58% of pending orders in the 100-pip range are to BUY
- SWFX market sentiment is at equilibrium
- Rate faces resistance support circa 1.3450
- Upcoming events: ADP Non-Farm Employment Change
The Sterling was little changed against the US Dollar on the UK Services PMI data, though the report managed to sustain the exchange rate above the 1.3400 level. The GBP/USD rose 15 base points or 0.11% to make further attempts to overcome 1.3440.
The UK economy suffered by the end of 2017, compared to the Euro zone's strong recovery, as the effects of Brexit vote kept weighing on businesses and shoppers. Markit said that country's services PMI dropped to 53.8 in the month of November. The businesses within the industry faced double impact, as costs increased mainly due to the lack of skilled labour, while inflation growth continued to squeeze household incomes and their willingness to spend.
ADP Non-Farm Employment Change
The only significant data release in this session is the US ADP Non-Farm Employment Change for November at 1315GMT.
Meanwhile, there is also some minor releases during the day, such as the US Revised Nonfarm Productivity and Revised Unit Labour costs for the third quarter of 2017 at 1330GMT, as well as the US IBD/TIPP Economic Optimist; release time remains tentative.
GBP/USD goes down amid 55-hour SMA
Despite release of worse than expected Services PMI data, the cable could not pass below the monthly PP located at 1.3372 and was forced to halt the fall. At the moment, it is moving horizontally, being squeezed between the 55- and 100-hour SMAs from the top and the weekly PP with the 200-hour SMA from the bottom.
Even though support barriers look stronger, generally, the rate is expected to continue moving downwards. However, there is a need to take into account that this pair is highly affected by political news coming from both sides of Atlantic that lead to impulse spikes, which can not only break minor patterns but even alter the forming downtrend.
Hourly chart
The Pound continues to weaken against the US Dollar for the second consecutive session. The pair managed to limit its loses to 37 pips on Tuesday, thus remaining above the weekly PP located at 1.3416. Bears, however, pushed the rate below this line and towards the monthly PP this morning.
It is likely that the bearish sentiment allays during this session. Thus, the Pound might close the day above the weekly pivot point. In general, the pair's movement during this week is still expected to be downwards.
Market sentiment largely bearish
The SWFX market sentiment is located at equilibrium on Wednesday, thus losing two percentage points of its yesterday's bearish momentum. Meanwhile, 61% of pending orders are to buy the Pound (+5%).
The market sentiment of OANDA traders is bearish, as 57% of open positions are short (+1%). Saxo Bank clients share the same sentiment with 60% short positions (-4%).