Brexit volatility is back on the GBP/USD charts. Namely, the UK's political parties are negotiating and quarrelling among themselves.
In general, the hourly chart's patterns were broken. The future forecast is described below.
On Thursday, May 2, the Bank of England Monetary Policy Committee voted to hold the Bank Rate unchanged at 0.75%.
According to the Bank of England Inflation Report, the UK CPI inflation is falling moderately below the medium-term target of 2%. However, inflationary pressure is expected to lessen later this year, as the British Pound might recover from the fall in world trade and business confidence.
The Bank's decision might indicate the start of smooth transition to new trading relationships with the EU bloc.
UK data on Friday a top priority for GBP/USD
This week all the action on the US Dollar from a fundamental side will be in the second half of the week. Meanwhile, there are large events to watch prior to that.On Tuesday, the Reserve Bank of Australia might cause moves up to 40 pips on Aussie pairs. At 04:30 GMT the RBA cash Rate is announced. Dukascopy will have a preview video on the Dukascopy Webinars YouTube channel.
On Wednesday, at 02:00 GMT the Reserve Bank of New Zealand will make their rate announcement. This event has caused moves larger than 100 pips during the last two announcements. If you trade sudden moves, get on this, stay late or wake up early.
On Thursday, the usual data starts. At 12:30 GMT the Canadian Trade Balance and the US Producers Price Index will be released. These events can cause a move from five to eighty pips. The range is explained in the weekly Economic Calendar Overview video.
On Friday, there will be two times to watch the calendar.
At 08:30 GMT the UK GDP and Manufacturing Production will be published. This event can cause a move of fifteen to twenty pips.
At 12:30 GMT the Canadian Employment data will cause a move of about forty pips. At the same time the US Consumer Price Index release should cause a move of up to twenty pips. Combined they can have various impacts on the Forex market.
Watch this week's economic calendar analysis and leave comments with questions about the specifics.
GBP/USD short-term review
On Friday, the GBP/USD managed to break the ascending pattern that guided it in two ways just in a couple of hours. Namely, after declining just below the 1.3000 level, the rate began a surge, which reached 1.3170.The rate is once more being pushed around by Brexit announcements. Namely, the UK's ruling parties were negotiating on a deal among themselves on how to arrange Brexit.
Although, the rate was declining on Monday, as the deal was destroyed by information leaks.
In general, the rate should decline down to the support of the weekly PP at 1.3089, which is expected to be strengthened by the 55 and 100-hour simple moving averages.
Hourly Chart
On the daily candle chart, the 55-day simple moving average was broken during the Friday's volatility.
On Monday, the simple moving average was providing support to the currency exchange rate.
Daily chart
On Monday, traders went short, as 54% of total open position volume was in short positions.
Meanwhile, trader set up pending orders in the 100-pip range were bullish. Namely, 54% of all orders were set to buy.
The short traders might have close by take profits and stop losses, as they ride the current decline with tight risk management.