- 56% of all pending orders are to buy the Pound
- 58% of all open positions are long
- Possible upside limit rests at 1.3030
- Significant support rests circa 1.2922
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Upcoming Events: G20 meetings, UK Manufacturing Production m/m, UK Goods Trade Balance, US Average Hourly Earnings m/m, US Non-Farm Employment Change, US Unemployment Rate, BOE Governor Carney Speaks, Fed Monetary Policy Report
The US private sector created less jobs than expected last month, suggesting that the labour market was cooling after oversized gains registered earlier. The ADP National Employment Report released on Thursday showed companies added 158,000 new jobs to the economy in June, following the preceding month's downwardly revised figure of 230,000 and surpassing analysts' expectations for an 185,000 increase.
The second-weakest report within this year signify that businesses decided to hold off expansion plans until the Trump's administration plans are realised. Moreover, experts suggested that companies would continue to face difficulties of finding skilled workers as the labour market is expected to tighten even further. The report was watched closely by the Federal Reserve, which remained curious about job creation as well as its effects on wage growth. In addition, a growth in inflation is expected to reflect a rise in salaries, fueling the US economic recovery. Notwithstanding the insufficient inflationary pressures, the Fed is likely to raise interest rates at least one more time in 2017.
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Busy Economic Calendar
The main political event for the following two days will be the G20 Summit in Hamburg, Germany. The BOE Governor Carney is to speak at this event about the economic impact of climate change. The time for his speech, however, is not yet fixed. In terms of data releases, the UK is to start the series with monthly manufacturing production and goods trade balance at 0830GMT. Subsequently, the United States are to release three sets of data at 1230GMT, namely, the monthly average hourly earnings, non-farm employment change and the unemployment rate. In addition, the Fed is to publish its Monetary Policy Report at 1500GMT.
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GBP/USD moves in up-trend
The Pound appreciated against the US Dollar on Thursday, reaching the 1.2974 mark late in the evening. The pair found support at the weekly PP and the 55-hour SMA, while minor resistance was met at the 100-hour SMA. Friday's morning session started with weak volatility prior to the pair gaining momentum to the downside. In the short term, the pair may be pushed south, testing a resistance cluster formed by the 100– and 55-hour SMAs. However, technical indicators favour further appreciation that may consequently confirm an up-trend. Thus, a possible trading range in this session may be 1.2940/1.3030, regarding as very likely an attempt to approach the upper limit. Meanwhile, a breakout of the aforementioned support cluster could lead to a test of the 1.2920 area.
Hourly chart
GBP/USD was driven by slight downside risks in the morning session that resulted in the Pound losing ground against the US Dollar. The nearest support of importance is a cluster formed by the monthly PP and the 55-day SMA circa 1.2880. Resistance, however, is very distant, being located at the 1.3212 mark (38.2% Fibo).Daily chart
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Bearish sentiment prevails
Market sentiment is bullish on Friday, as 58% of open positions are long (61% on Thursday). Likewise, 56% of set up orders are to buy the Pound.
On the contrary, traders at Saxo Bank have increased their bearish sentiment, with 66% of traders holding short positions (63% on Thursday). Moreover, 58% of OANDA clients hold short positions.
Spreads (avg, pip) / Trading volume / Volatility
Traders see Pound falling
© Dukascopy Bank SAThe majority of traders believe that the Cable is to fall below the 1.28 mark three months from now, as 61% of survey participants share this belief. The current spot price is around 1.2955, while the average forecast for October 7 is 1.2750 (1.2760 on Thursday). The 1.24-1.26 range remains the most popular price interval, having 29% of the votes (+2%).