On Friday, on the hourly chart of the GBP/USD a descending channel pattern was discovered, which is expected to guide the rate down to the 1.2940 level.
Meanwhile, take into account that the 55-hour SMA was strengthening the resistance of the channel down pattern's upper trend line.
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.
US CPI will close the week
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.
Watch this week's economic calendar analysis and leave comments with questions about the specifics.
GBP/USD short-term review
During the previous trading session, the GBP/USD exchange rate traded sideways between the weekly S1 and the monthly PP, located at 1.2997 and 1.3033 respectively.Given that the rate is pressured by the 55-hour moving averages at 1.3017, it is likely, that some downside potential could prevail in the market. In this case, the currency pair could decline to the 1.2960 mark.
However, if the given support level holds, it is expected, that the pair could continue to trade sideways. Technically, it is unlikely, that the rate could surpass the 1.3050 level due to the resistance of the 100– and 200-hour SMAs.
Hourly Chart
On the daily candle chart on Thursday the rate had pierced the support of the 100-day simple moving average at 1.3000.
Meanwhile, the daily chart reveals that the 200-day simple moving average was located at 1.2960. This level is the most close by support.
Daily chart
Meanwhile, trader set up pending orders in the 100-pip range were slightly bullish, as 53% of orders were set to buy.