Average Hourly Earnings were forecast to show a monthly increase of 0.3%. The actual income change is just 0.2%. Non-Farm Employment Change was expected to show a reading of 176,000 new jobs. The reality is that only 114,000 new jobs have been created. Market consensus was that the Unemployment Rate would be at 4.1%. Released number shows unemployment at 4.3%.
The GBP/USD reacted to the news by surging up to the 1.2840 level that acted as resistance. Afterwards, the pair appeared to be consolidating near the 1.2800 mark.
Economic Calendar
On Monday, the Institute for Supply Management will publish the Services sector Purchasing Managers Index. The index is the result of survey of top 300 managers in the services sector. A reading above 50.0 is positive. A reading below 50.0 is seen as negative.
Market conensus forecast is that the reading will be a positive 51.4. A reading below this number should cause a decline of the US Dollar.
Besides the mentioned event,the secodn week of August lacks notable events. The only event that could cause a market reaction is the publication of the weekly US Unemployment Claims on Thursday at 12:30 GMT.
GBP/USD hourly chart analysis
A resumption of the surge is expected to face resistance at 1.2840, 1.2860 and the 1.2900 levels. In addition, note the 100 and 200-hour simple moving averages.In the case of a decline, the rate is set to look for support of the 50-hour simple moving average near 1.2790. Below the SMA, the 1.2735/1.2750 range is expected to provide support, before the rate reaches the 1.2700 mark.
Hourly Chart
GBP/USD daily candle chart analysis
On the daily candle chart, the rate pierced the lower trend line of the pattern and was set to reach the 100 and 200-day simple moving averages. However, the US employment release casued a surge. By late Friday, the rate was testing the resistance of the 1.2800/1.2850 range.If the pair again passes below the channel's lower trend line, there is no additional support on this chart as low as the combination of the 100 and 200-day simple moving averages below 1.2700. However, note that the 1.2700 has been acting as both as support and resistance.
On the other hand, a potential recovery is facing the 1.2800/1.2850 range. Higher above take into account the 1.2900 mark.
Read More: Technical Analysis
Traders remain bearish
After the US data release, traders short, as 57% of open position volume at Dukascopy was in bearish positions.
In the meantime, trader set up pending orders in the 100-pip range above and below the current rate were 55% to buy.
On Thursday, traders were 54% short. Meanwhile, pending orders were 64% to buy the GBP versus the USD.
After the US data release, traders short, as 57% of open position volume at Dukascopy was in bearish positions.
In the meantime, trader set up pending orders in the 100-pip range above and below the current rate were 55% to buy.
On Thursday, traders were 54% short. Meanwhile, pending orders were 64% to buy the GBP versus the USD.