By the middle of Wednesday's trading, the decline of the GBP/USD had touched the low level of 1.2382.
If one zooms out the hourly chart and loads previous price information for exact referencing of trend line, it can be seen that the rate met with a strong support cluster.The support cluster is made up of a dominant pattern's lower trend line, a historical low level and a monthly pivot point.
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."
UK data incoming
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
Yesterday, the GBP/USD exchange rate tried to surpass the descending trend line located circa 1.2400. During Wednesday's morning, the rate was testing the given line.Note, that the currency pair is supported by the weekly and the monthly S2s, located circa 1.2390. Thus, if the given support holds, it is likely, that the rate could reverse north.
It is unlikely, that the pair could jump higher than the 1.2480 mark due to the resistance of the 55-hour SMA and the weekly S1.
On the other hand, the rate could continue to go downwards, trading along the given trend line.
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 Tuesday, 73% of open GBP/USD position volume was in long positions.
Meanwhile, trader set up pending orders in the 100-pip range were bullish, as 60% of orders were set to buy.