Bad German PMI data caused a spillover decline that affected the GBP/USD and forced it into breaking the support of an ascending pattern.
By the middle of Friday's trading the rate had recovered from dropping down to the 1.2980 level and was testing the resistance of 1.3000.
The British Pound appreciated against the US Dollar, following the UK Retail Sales data release on Thursday at 8:30 GMT. The GBP/USD exchange currency rate gained 16 pips or 0.13% right after the release. The British Pound continued trading at the 1.3010 level against the US Dollar.
Office for National Statistics released the UK Retail Sales data that came out better-than-expected of 1.1% compared with forecast –0.3%.
According to analysts, the unexpected increase in the UK retail sales was driven by Brexit uncertainty. It is likely, that consumers are undisturbed by the UK departure from the EU bloc. Consumers have supported the UK economic growth since the referendum.
No more data this week
There will be no more significant data being published this week. Data releases will resume next week.First, the Canadian central bank will publish their interest rate on Wednesday at 14:00 GMT.
On Thursday, the US Durable Goods Orders data will be published at 12:30 GMT. This event can cause a move of up to 20 base points.
The data will end on Friday, as at 12:30 GMT the US Advance GDP will be published. This is the top US data set, which has the largest impact on the USD.
Meanwhile, check out previous data release covers and economic calendar analysis on the Dukascopy Webinars YouTube channel.
GBP/USD short term review
GBP/USD was surging on Friday. The currency exchange rate had begun to surge on Thursday when it found support in a pivot point at 1.2978.The rate is expected to continue upwards until it meets with the resistance of a pivot point and the 55-hour simple moving average near the 1.3025 level. Afterwards, these resistance levels should force the currency exchange rate into a decline.
On the other hand, the pair might fluctuate sideways in the range from 1.2980 to 1.3000 until the mentioned simple moving average approaches and pushes the pair down.
Hourly Chart
On the daily chart the large scale ascending pattern was broken on Wednesday.
Note the resistance line, which managed to eventually force the currency exchange rate through the lower trend line of the large scale ascending pattern.
Meanwhile, on Thursday it could be noticed that a strong support cluster was forming near 1.2980. At that level the weekly S2 was about to be strengthened by the 100 and 200-day simple moving averages.
The 200-day SMA managed to stop the currency exchange rate from declining at the end of March and start of April.
Daily chart
Meanwhile, the pending orders in the 100-pip range had also become bearish. 56% of the orders were set to sell. The rest of the orders were to buy.