- 72% of all pending orders are to buy the Sterling
- Bulls now take up 55% of the market
- Expect a sell-off from 1.3170
- Support is around 1.2950
- 53% of traders reckon GBP/USD will be at 1.30 or higher in three months
- Upcoming events: US Jobless Claims, US Import Price Index, US Mortgage Delinquencies, US Retail and Core Retail Sales, US PPI and Core PPI, Reuters/Michigan Consumer Sentiment
The number of job openings in the United States increased more than expected during the sixth month of the year, official data showed on Wednesday. According to the US Department of Labor, the number of positions waiting to be filled rose to 5.62 million in June, following last month's upwardly revised figure of 5.51 million. Market analysts anticipated a slight increase to 5.52 million in the reported month. Furthermore, there were 5.1 million hires and 4.9 million separations with 2.9 million quits in June. The JOLTS report is closely followed by Federal Reserve chair Janet Yellen, who often cites it when assessing the state of the labour market.
US crude oil inventories rose for the third consecutive week, surpassing analysts' expectations, the weekly report from the Energy Information Administration revealed on Wednesday. US commercial crude inventories increased by 1.1 million barrels in the week ended August 5, following the 1.4 million barrel rise posted in the previous seven days. Meanwhile, markets expected a decrease of 1.3 million barrels in the reported period. Recently, the International Energy Agency revised up significantly its 2017 global oil demand growth forecast to 97.4 million barrels per day, whereas the World Bank downgraded its 2016 global growth forecast to 2.4% from January's 2.9%.
US Import Price Index and Initial Jobless Claims are the only relevant events
For another day there are no important events from the Sterling's side of the calendar, whereas from the Greenback's the Import Price Index and the Initial Jobless Claims are due. The Import Price Index informs the changes in the price of imported products into the US. The higher the cost of imported goods, the stronger the effect they will have on inflation, redunding in a higher probability of a rate rise. The Initial Jobless Claims are a measure of the number of people filing first-time claims for state unemployment insurance. In other words, it provides a measure of strength in the labor market. A larger than expected number indicates weakness in this market which influences the strength and direction of the US economy.
GBP/USD struggles to remain above 1.30
The Pound's attempts to recover from a five-day loss streak were in vain, as almost all intraday gains were erased yesterday, leaving the Cable relatively unchanged. The failure to appreciate suggests that the bearish trend remains dominant and technical indicators now also support this by giving bearish signals in the daily timeframe. However, another sharp decline is unlikely to take place today, due to lack of potential market movers. Furthermore, the 1.30 major level keeps acting as a psychological support, with the Bollinger band and the weekly S1 being the closest solid demand area around 1.2950, which are to limit the losses in case bears take over the market today.
Daily chart
On the hourly chart the GBP/USD pair appears to have formed a descending channel pattern since last Friday. Yesterday the upper border of the channel was confirmed, thus, the Cable should now continue moving lower until the lower border is put to the test at 1.29.
Hourly chart
Still no consensus
Market sentiment returned to its Tuesday's level, with bulls now taking up 55% of the market, compared to 52% on Wednesday.
Indecision appears to be widespread, as the same neutral sentiment is observed among the traders of other brokers. At OANDA, 56% of positions are long and 44% are short. The sentiment at Saxo Bank remains close to a perfect equilibrium, as the numbers of longs and shorts each take up 51% and 49%of the market, respectively.
Spreads (avg, pip) / Trading volume / Volatility
Majority sees GBP/USD above 1.30 in three months
More than half of traders (53%) believe the British currency is to cost 1.30 or more dollars after a three-month period. The most popular price interval, however, was selected by 19% of the voters, namely the 1.24-1.26, while the second most popular choice implies that the Sterling is to cost between 1.28 and 1.30 dollars in three months, chosen by 14% of the surveyed. At the same time, the mean forecast for Nov 11 is 1.3171.