- 57% of pending orders in the 100-pip range are to SELL
- 53% of traders are bullish on the Sterling (+1%)
- Strong support area circa 1.4125
- Upcoming events: UK Manufacturing PMI, US Preliminary Nonfarm Productivity q/q, US Preliminary Unit Labour Costs q/q, US Unemployment Claims, US ISM Manufacturing PMI
The US Federal Reserve announced the decision to keep interest rates at 1.50% on Wednesday, but stated that consumer inflation is likely to accelerate this year, fuelling expectations that borrowing costs would keep climbing under the new Central Bank's Chief Jerome Powell.
Citing strong increases in household spending, capital investment and employment, the Fed anticipated the country's economy to expand at a modest pace and the job market to remain solid in 2018. The Bank is expected to hike rates three times more this year.
Manufacturing PMIs
The main fundamental events for today are the British Manufacturing PMI and the ISM Manufacturing PMI for January to be released at 0930GMT and 1500GMT. The United States will also publish its Preliminary Nonfarm Productivity, Preliminary Unit Labour Costs and the weekly Unemployment Claims at 1330GMT.
GBP/USD flashes mixed signals
The Pound remained stable against the US Dollar during the previous session. The pair tried to edge lower; however, this movement south was disrupted by a support cluster formed by the 100– and 55-hour SMAs and the weekly PP circa 1.4130.
As apparent on the chart, the Pound has been moving in a down-trend during the previous week. In case this trend is to persist, the Sterling should try to push for the monthly PP located at 1.40. However, the current southern barrier is expected to introduce changes to this assumption, thus sending the Pound slightly higher towards the 1,5-yeah high of 1.43.
Meanwhile, the failure to appreciate in this session would result in a slight period of consolidation that could in fact be an early indication of a medium-term decline.
Hourly chart
GBP/USD has remained near the 1.42 mark for the sixth consecutive session. Even though the pair has managed to edge higher this week, the 1,5-year high of 1.4250 is likely to halt further advance and thus start pressuring the rate southwards.
Daily chart
SWFX market sentiment remains bullish today, as 53% of traders are holding long positions, compared to 52% on Wednesday. Meanwhile, 54% of pending orders are still to sell the Pound (+1%).
The bearish sentiment of OANDA traders has strengthened to 58% of all open positions being short (+5%). Saxo Bank clients share the same sentiment with 59% short positions (unchanged).
Spreads (avg, pip) / Trading volume / Volatility