On Tuesday morning the GBP/USD broke the resistance of the 200-hour simple moving average and began a surge, which was expected to reach 1.3000.
At the 1.3000 level the rate will reach the resistance of a large scale descending channel and the weekly R1.
The British Pound appreciated against the US Dollar, following the UK Retail Sales data release. 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.
Central banks will impact GBP/USD
During this week there are various macroeconomic data releases that will impact currency exchange rates. Moreover, there will be a Federal Funds Rate announcement.On Tuesday, the Canadian GDP is expected to cause a significant impact on the CAD pairs at 12:30 GMT.
During Wednesday's trading session there will be two events to watch. First will be the ISM Manufacturing PMI, which will be covered this week for one reason. To once more show that this data release is not significant enough to be on economic calendars, as it causes no increases of volatility.
On the other hand, the opposite might be revealed during the analysis.
On the same day note that the most important event of the month will take place. At 18:00 GMT the US Federal Funds Rate and FOMC Statement will be published. The US Federal Reserve will reveal the future of the US Dollar.
On Thursday, the Bank of England announced their monetary policy data and information at 11:00 GMT. Moreover, the Governor of the bank will speak at 11:30 at a press conference.
On Friday, the US Employment data sets will be published at 12:30 GMT. This event is considered the second most important release for the USD. However, due to three data sets having individual impact on the USD the range of the volatility increase is wide during the data release.
Meanwhile, check out the previous data release covers and economic calendar analysis on the Dukascopy Webinars YouTube channel.
GBP/USD short-term review
The rate broke the resistance of the 200-hour SMA and is heading for the resistance of a descending channel pattern and the weekly R1 of the simple pivot points at 1.3000.In general, the rate should bounce off this resistance and begin a decline down back to the 1.2950 level.
Meanwhile, the resistance of the pattern might fail and a surge higher would occur. In that case the weekly R2 at 1.3090 would be targeted.
Hourly Chart
On the daily candle chart note the resistance of the 100 and 200-day SMA. Both of these resistance levels were located at 1.2970.
These technical levels were expected to provide resistance together with the resistance line that has kept the GBP/USD down since March.
Daily chart
Meanwhile, trader set up pending orders in the 100-pip range were bearish. Namely, 64% of all orders were set to sell.