The squeeze between the 55 and 200-hour SMAs resulted in a break out to the upside. The surge reached the 1.2580 level before the rate retraced back down.
On Monday, the GBP/USD had found support near 1.2550 and was expected to surge.Latest Fundamental Event Report
The Federal Reserve released the US FOMC Meeting Minutes data, where the US policymakers provide in-depth insights into the economic and financial conditions that influenced their vote on where to set interests rates.
According to the official release: "Investors' concerns about downside risks to the economic outlook weighed on financial markets over the intermeeting period. Market participants cited negative news about international trade tensions and, to a lesser extent, soft U.S. and foreign economic data as factors that contributed to these developments.
Nominal Treasury yields posted notable declines and the expected path of policy shifted down considerably over the period. Equity prices declined, on net, and corporate bond spreads widened. However, financing conditions for businesses and households generally remained supportive of economic growth."
Various UK releases
This week will be busy for GBP/USD macroeconomic move traders. Almost each day has a notable data release.
On Tuesday morning, the UK Average Earnings Index will be published at 08:30 GMT. The event has caused moves on GBP/USD from 10.2 to 26.5 pips since February.
On the same day, at 12:30 GMT a significant move could be caused by the US Retail Sales. The event has caused moves from 11.3 to 28.9 pips on the GBP/USD charts.
On Wednesday, the UK CPI will be released at 08:30 GMT. The event has caused since January moves from 15.5 to 23.1 base points.
On Thursday morning, the UK Retail Sales will be published at 08:30 GMT. The Retail Sales have caused moves from 11.5 to 24.5 pips.
For more information watch this week's Economic Calendar Analysis
GBP/USD short-term review
During the early hours of Monday's London trading session, the GBP/USD had retreated down to the technical support levels near 1.2545.In general, the rate was expected to be strengthened by the 55-hour simple moving average and move upwards to the resistance of the weekly R1 at 1.2627.
On the other hand, it is possible that a solo moving average will not have enough strength to push the rate upwards, as it can be observed that the 200-hour SMA was broken by the rate.
Hourly Chart
On the daily candle chart one can observe that the rate remains in the borders of a descending channel pattern. Namely, the pair is targeting the lower channel line.
The trend line was located on Wednesday at the 1.2420 level.
Daily chart
Since the middle of Friday's London trading, 72% of open GBP/USD position volume on the Swiss Foreign Exchange was in long positions.
Meanwhile, trader set up pending orders in the 100-pip range were bearish, as 55% of orders were set to sell.