- 56% of pending orders in the 100-pip range are to SELL
- 51% of traders are bullish on the Sterling
- Strong resistance area circa 1.3555
- Upcoming events: FOMC Members Bostic and Williams to speak, US Consumer Credit m/m
The US employment growth weakened significantly in December due to a decrease in retail jobs, while a surge in monthly pay gains indicated the labour market strength, which could enable the Federal Reserve to hike interest rates in spring.
The Labour Department stated that the non-farm payrolls increased 148K in the reported month, following an upwardly revised 252K in November. Job growth is anticipated to moderate as the labour market remains close to full employment, though with some chances to get a boost from $1.5T tax cuts package.
Uneventful day
Monday's trading session is considered uneventful. The President of the Federal Reserve Bank of Atlanta Raphael Bostic is due to speak about the US economic outlook and monetary policy at the Rotary Club of Atlanta, while his counterpart in San Francisco John Williams will participate in a panel discussion about whether the Federal Reserve should revise their 2% inflation target. The given speeches are scheduled for 1740GMT and 1835GMT, respectively.
In addition, the Federal Reserve is to release monthly data on consumer credit at 2000GMT. This event is unlikely to affect the market in any way.
GBP/USD drops below weekly PP
As most of the American macroeconomic data released on Friday did not justify expectations, the cable ended the week in a green zone. Nevertheless, in the early hours of this trading session it started with an active plunge, slipping through the updated weekly PP, the 55- and 100-hour SMAs.
An existence of two ascending channels suggests that the drop might be stopped near the 1.3545 level. In the meantime, other technical indicators point out that the two closest notable support levels are located around the 1.3540 and 1.3500 marks.
Nevertheless, there is a need to take into account that majority of pending orders both in 50- and 100-pip ranges are set to sell.
Hourly chart
The Sterling has remained relatively stable against the US Dollar since the beginning of 2018. However, technical indicators suggest that the bearish sentiment might prevail this week (during this session, as well), thus sending the pair towards the weekly S1 and the monthly PP at 1.3507 and 1.3459, respectively.
Daily chart
The SWFX sentiment remains bullish in this session, as 51% of traders are holding long positions for the second consecutive session. In addition, 52% of pending orders are to buy the Sterling (-1%).
Meanwhile, OANDA traders are bearish today with 57% short positions (+1%). Saxo Bank clients share the same sentiment with 66% short (+4%).
Spreads (avg, pip) / Trading volume / Volatility