Non-farm Employment Change was forecast to show 238,000 new jobs created. Actual numbers is just 175,000. Average Hourly Earnings were expected to show an increase of 0.3%. Wages have increased just 0.2%. The Unemployment Rate has not remained at 3.8%. It has moved back to 3.9%.
After the initial sharp pop upwards, profit taking appeared to be taking place, as the GBP/USD retraced to the support of the 1.2535/1.2540 range. This range had acted as resistance at the start of the month. Moreover, the support range was strengthened by the 50 and 100-hour simple moving averages. Economic Calendar
During the week, there is nothing notable that could move the markets via an adjustment of the value of the US Dollar. Some might look at the University of Michigan Consumer Sentiment survey results. However, our analysts can barely recall when this data set caused a significant move.
Meanwhile, there are major events and data publications in the United Kingdom that will move the Pound. On Thursday, at 11:00 GMT, the Bank of England will reveal its monetary policy by publishing the Monetary Policy Summary and revealing the Official Bank Rate.
The rate's forecast has been correct since September. The bank is expected to keep rates unchanged just like the Federal Reserve. However, watch how the committee votes. It is currently expected that all nine members of the committee will vote to keep the rate as it is. If someone votes for a cut or hike, it will move the GBP down or up.
Moreover, on Friday, at 06:00 GMT, the UK monthly GDP change will be published. Markets expect a stagnation increase of 0.1%. A different reading is going to cause a GDP move. If the actual number is below 0.1%, the Pound will drop in value, as the central bankers have to stimulate the economy. A higher reading will strengthen the Pound.
GBP/USD hourly chart analysis
A resumption of the surge would most likely face resistance in the 1.2600 and 1.2700 levels. Moreover, it is expected to be slowed down by weekly simple pivot point, as the rate has respected them in the past.Meanwhile, a potential decline would have to pass the 50, 100 and 200-hour simple moving averages, before a decline reaches the 1.2460 level. Further below, the 1.2400/1.2420 range is set to act as support.
Hourly Chart
GBP/USD daily candle chart analysis
On the daily candle chart, the change in fundamentals is expressed by the rate breaking out of the channel down pattern. The pattern represented the decline that occurred as the Dollar strengthened throughout the last months. Data was being released which indicated that the US monetary policy makers cannot cut rates. Latest events show that it can still be done.However, the 50 and 100-day simple moving averages are still acting as resistance near 1.2600/1.2630. These levels have to be passed for the pair to establish a new trend.
It is highly likely that the resolution to the situation will occur after the UK events are over.
Daily chart
Read More: Technical Analysis
Traders are still long
On May 3rd, traders were 57% long, as that proportion of all open position volume on Swiss Foreign Exchange was in bullish positions.
Meanwhile, pending orders in the 100-pip range around the rate were 59% to buy.
After the Federal Reserve events, the sentiment was 55% long and orders were 60% to sell.
It is clear that most traders went long after Powell's comments. Moreover, after the US employment data, more added to long positions. In addition, see that buy orders dominate. There are close by orders to open more long positions and close short positions.
Meanwhile, pending orders in the 100-pip range around the rate were 59% to buy.
After the Federal Reserve events, the sentiment was 55% long and orders were 60% to sell.
It is clear that most traders went long after Powell's comments. Moreover, after the US employment data, more added to long positions. In addition, see that buy orders dominate. There are close by orders to open more long positions and close short positions.