- 51% of pending orders in the 100-pip range are to BUY
- 55% of traders are bearish on the Sterling (-2%)
- Strong support circa 1.3950
- Upcoming events: UK Preliminary GDP q/q, US Advance GDP q/q, US Core Durable Goods Orders m/m, US Advance GDP Price Index q/q, US Durable Goods Orders m/m, BOE Governor Carney to speak, WEF Annual Meetings
The British Pound appreciated against the US Dollar on the official UK labour market data. The GBP/USD currency pair added 22 base points or 0.16%, touching the 1.4116 mark, and managed to sustain the up-move.
The number of working people in the UK rose surprisingly in the three month period to November, while regular wages increase at the strongest rate in a year, the official report indicated on Wednesday. The Office for National Statistics stated that the Average Earnings Index was unchanged at 2.5%, while earnings without bonuses grew 2.4% year-over-tear in the reported period. Statisticians said that with the amount of vacancies at a new record and strong employment, demand for labour remained solid.
Focus on US, UK GDP
Friday's trading session involves several noteworthy fundamentals. The British Office for National Statistics will publish the country's Preliminary GDP for the fourth quarter of 2017 at 0930GMT.
In addition, the United States is to publish four sets of data at 1330GMT, namely, the Advance GDP for Q4 2017, the Advance GDP Price Index and the (Core) Durable Goods Orders for December.
The session will be concluded by the BOE Governor Mark Carney who is to participate in a panel discussion "Global Economic Outlook" at the World Economic Forum in Davos at 1400GMT together with the BOJ Governor Haruhiko Kuroda.
GBP/USD edges higher prior to data releases
Despite strong signals of reversal, the Sterling managed to maintain its high position against the US Dollar on Thursday, as it was trading slightly below the 1.43 mark —its 1,5-year high—during most of the session.
This still movement was disrupted by Trump's comments on stronger US Dollar which sent the pair for a 117-pip hourly plunge. This fall was supported by the 55-hour SMA which allowed for a subsequent appreciation towards 1.4250.
As apparent on the chart, the previously-drawn ascending channel still holds; however, its steep positioning points to a soon breakout south.
By and large, this session should offer high volatility due to important data releases from both the UK and the US. A strong support should be provided by the 200-hour SMA, the 38.2% Fibo and the weekly R1 circa 1.3960.
Hourly chart
The Sterling has remained near the weekly R3 for the second consecutive session. By Friday morning, the pair managed to regain all positions lost in the previous session. However, the rate's further appreciation seems unlikely, as daily technical indicators are located near their historic highs. Given the pair's high positioning, the following trading days are likely to mark a period of decline.
Daily chart
The bearish SWFX sentiment has slightly weakened today, as 55% of traders are holding short positions (-2%). Meanwhile, pending orders are also bearish, as 54% of orders are now set to buy.
The bearish sentiment of OANDA traders has decreased by one percentage point with 58% short positions prevailing. Saxo Bank clients share the same sentiment with 57% short positions (+2%).
Spreads (avg, pip) / Trading volume / Volatility