- 65% of pending orders in the 100-pip range are to SELL
- SWFX sentiment at equilibrium
- Notable resistance located circa 1.3560
- Upcoming events: UK Services PMI, UK Net Lending to Individuals m/m, US ADP Non-Farm Employment Change, US Unemployment Claims
The Sterling retreated from September highs against the US dollar, following the report showing a slowdown in the UK building business. The GBP/USD currency pair kept falling gradually to 1.3500 level.
The UK construction sector's expansion weakened in December for the first time in four months, as slow growth in commercial and house-building came in with stagnating infrastructure activities, a survey indicated. The Markit/CIPS stated that Britain's construction PMI decreased to 52.2 in December, after being seen at the five-month high of 53.1 in the prior month. Meanwhile, the country's services PMI is scheduled for Thursday to determine whether the economic growth lost momentum in the 2017 end and how Brexit weighed on expansion.
Various fundamentals in this session
This session will start with the British Services PMI and Net Lending to Individuals at 0930GMT. In addition, the US is to publish ADP Non-Farm Employment Change for the month of December and weekly Unemployment Claims at 1315GMT and 1330GMT, respectively.
GBP/USD meets 100-hour SMA
Previous trading session the Pound ended with a 104-pip fall against the Dollar. The support was provided by the 100-hour SMA. Most probably this indicator will continue to drive the cable up to the 55-hour SMA located at 1.3553.
Even in case of release of disappointing British Services PMI data the pair is not expected to fall below the 1.3500-1.3580 marks as this support area is additionally secured by the 50% Fibonacci retracement level and the weekly PP.
However, in larger perspective the buck is expected to take the lead once again. This assumption is supported by traders' sentiment, which is predominantly bearish as well as allocation of pending orders which are mostly set to sell.
Hourly chart
Downside risks dominated the pair on Thursday, thus allowing for a 74-pip plunge in one session. However, the Sterling did not leave its trading range, as it still remains between the weekly and monthly PPs and R1s.
Given the strong of both barriers, this area is expected to hold within the remaining week.
Daily chart
The market sentiment stands at equilibrium in this session, thus decreasing the number of short positons by one percentage point. Meanwhile, 54% of pending orders are to buy the Sterling (-2%).
OANDA traders are bearish today with 55% short positions (-1%). Saxo Bank clients share the same sentiment with 62% short positions (-5%).
Spreads (avg, pip) / Trading volume / Volatility