On Tuesday morning, the GBP/USD was testing the resistance of the 1.2760 level.
In general, the rate was expected to pass this level sooner or later.
The British Pound depreciated against the US Dollar, following the UK Monetary Policy Summary and Official Bank Rate data releases on Thursday at 11:00 GMT. The GBP/CAD exchange currency rate lost 29 pips or 0.23% right after the release. The British Pound continued trading at the 1.2690 level against the Greenback.
The Bank of England released the UK Monetary Policy Summary data, where the UK policymakers provided in-depth insights into the economic and financial conditions that influenced their vote on maintaining the Official Bank Rate unchanged. Note, that MPC Official Bank Rate Votes data was published at the same time.
According to the official release: "The Committee continues to judge that, were the economy to develop broadly in line with its May Inflation Report projections that included an assumption of a smooth Brexit, an ongoing tightening of monetary policy over the forecast period, at a gradual pace and to a limited extent, would be appropriate to return inflation sustainably to the 2% target at a conventional horizon. The MPC judges at this meeting that the existing stance of monetary policy is appropriate."
US data and UK Current Account
There will be a couple of notable events that might impact the GBP/USD through the value changes of both GBP and USD.
The data that is noted by the financial markets as important starts on Wednesday. On that day, the US Durable Goods Orders and Core Durable Goods Orders will be published at 12:30 GMT.
This event since February has caused moves from 9.0 to 20.5 pips. Note that the 20.5 pip was an anomaly, as the rest of the events have caused from 9.0 to 15.1 pips.
On Thursday, the US Final GDP will be published at 12:30 GMT. This is the least important GDP of the three quarterly publications of the US GDP. Since March 2018 this event has caused moves from 12.0 pips to 52.0 pips.
On Friday, the UK will have data, as the UK Current Account will be announced at 08:30 GMT. This event has caused moves from 11.5 pips to 44.3 since March of 2018.
The full review of all of the notable events is available in video on the Dukascopy Webinars YouTube channel.
GBP/USD short-term review
On Tuesday morning, the GBP/USD continued to test the resistance of the 1.2760 level. Meanwhile, note that the rate had retraced down to the 55-hour SMA, where it found support for the most recent surge.In general, the rate is expected to pass the 1.2760 level, as soon as the lower trend line of the junior ascending channel pattern is reached. This event most likely will be consistent with another approach of the support of the 55-hour simple moving average.
On the other hand, if the support levels fail, the rate will have only the support of the 100-hour SMA, which on Tuesday was located at the 1.2694 level.
Hourly Chart
On the daily candle chart one can observe that the recent surge has bene consistent with the long term descending channel pattern.
In addition, on the daily chart the rate can no longer be considered oversold, as the 55-day simple moving average had approached the weekly R1 at 1.2830 and was strengthening its resistance.
Daily chart
By the middle of Friday's trading 70% of open position volume was in long positions at the Swiss Foreign Exchange.
On Monday, 68% of volume was in long positions. Traders had continued to close long positions and open short positions.
On Tuesday, the sentiment was 65% long.
Meanwhile, trader set up pending orders in the 100-pip range were mostly set to sell, as 62% of orders were set to sell. The proportion had not changed since Monday.
Most likely these orders are the stop losses of the long positions and short position open orders that would take advantage of a decline.