Due to the FOMC Meeting Minutes, the GBP/USD dropped and erased previous gains, as the US Dollar strengthened against all other assets.
On Thursday, the rate had almost reached the 1.3050 level.
Economic Calendar
On Thursday, the weekly US Unemployment Claims are set to be published at 12:30 GMT. The event has caused minor moves throughout July.
Click on the link below to find out more about the data releases.
GBP/USD short-term review
During the fundamental drop of the GBP/USD pair, the rate ignored all technical levels. Namely, pivot points, previous high levels and the hourly simple moving averages.On Thursday morning, the rate had reached the weekly simple pivot point at 1.3079 and pierced it. If the pivot point does not hold, the pair would reach for the last week's low level of 1.3050.
On the other hand, after the sharp drop the rate is oversold and it could consolidate by trading sideways or retracing back up. In the case of a surge, the rate would have to face the resistance of the 200-hour SMA at 1.3104 before attempting a surge to the technical levels near 1.3150.
Hourly Chart
A drop of the rate was signalled by the daily candle chart.
On the daily candle chart, the rate continues to trade in the borders of a channel up pattern, which has guided the pair since the middle of June. In theory, the pair should reach its lower trend line. It could occur by a decline or sideways trading around the 1.3100 level.
In the meantime, the rate is in the overbought zone, as it is trading far above the 55-, 100- and 200-day moving averages. This signals that the rate needs to trade sideways or retrace back down.
Daily chart
Read More: Technical Analysis
Traders were short during the drop
On Wednesday, 66% of trader open position volume on the Swiss Foreign Exchange was in short positions.
On Thursday, 68% of volume was in short positions.
Meanwhile, in the 100-pip range around the rate the pending orders were 66% to buy the GBP/USD pair.
On Wednesday, 60% of orders were to buy.
On Wednesday, 66% of trader open position volume on the Swiss Foreign Exchange was in short positions.
On Thursday, 68% of volume was in short positions.
Meanwhile, in the 100-pip range around the rate the pending orders were 66% to buy the GBP/USD pair.
On Wednesday, 60% of orders were to buy.