- 57% of pending orders in the 100-pip range are to BUY the Pound
- 56% of traders are bearish on the Sterling (+5%)
- Strong resistance at 1.40
- Upcoming events: UK Second Estimate GDP q/q, UK Preliminary Business Investment q/q, US Unemployment Claims, FOMC Member Bostic to speak
The British Pound considerably decreased against the US Dollar after the UK job market report was released. The GBP/USD dropped 32 base points, or 0.23%, to the 1.3943 mark, to recover back to the 1.3970 area.
The Office for National Statistics said that the number of people in work and the number of those unemployed both surged. Apart from that, data released by the ONS revealed that British workforce total weekly earnings, both including and excluding bonuses, reached the forecast, marking a 2.5% yearly growth pace in the three-month period to December. However, Matt Hughes, a Senior Statistician at the ONS, pointed out that prices grew faster than earnings, with consumer price inflation remaining at the 3.0% growth rate.
Attention towards British GDP
The main event that could introduce some volatility in the market is the British Second Estimate GDP for the fourth quarter of 2017 to be released at 0930GMT. The UK Preliminary Business Investment for Q4Y2017 will be published at the same time.
Meanwhile, the US is to publish its weekly unemployment claims at 1330GMT, while the President of the Federal Bank of Atlanta Raphael Bostic is due to speak at the Banking Outlook Conference at 1710GMT.
GBP/USD tended south
The resistance cluster which limited a move above the 1.40 mark provided a strong barrier for the Pound on Wednesday. Thus, bears took over the market. As already expected, the pair breached the two-week channel down circa 1.3825 later in the evening and has since been moving lower in line with the junior pattern.
Daily technical indicators favour a continuous fall within the following trading sessions; thus, it is likely that the Sterling targets the bottom boundary of the senior channel near 1.3750.
In terms of today, the pair is expected to remain between the weekly S1 and the combined resistance of the 55– and 200-hour SMAs and the 38.20% Fibo retracement in the 1.3840/1.3960 area. A retracement from the breached channel is the most likely scenario.
Hourly chart
The Sterling has failed to push higher within the previous days, thus suggesting that the bearish sentiment could guide the pair towards the 55-day SMA in the medium term. Daily technical indicators are likewise supportive of this scenario.
Daily Chart
The bearish market sentiment continues to prevail, as 56% of traders are holding short positions (+5%). Meanwhile, 51% of pending orders are to buy the pair, compared to 64% to sell yesterday.
The market sentiment of OANDA traders remains bearish with 56% short positions (+1%). Saxo Bank clients are likewise bearish with 59% short positions.
Spreads (avg, pip) / Trading volume / Volatility