The speech of the Governor of the Bank of England Bailey on Thursday morning caused a decline of the GBP/USD. However, the decline was stopped by the lower trend line of the channel up pattern and a pivot point at 1.2890.
On Friday morning, the rate had returned to the 1.2960 level and once again had no resistance as high as 1.3000. Namely, the speech only caused an increase of volatility.
Economic Calendar
The week's notable events are set to start on Tuesday. At 12:30 GMT, the US Consumer Price Index could cause a noteworthy move. In September and August this event caused a slight increase of volatility. The rate has moved 10.7 to 29.0 pips on the event.
On Wednesday, the US Producers Price Index is scheduled to be published at 12:30 GMT. The last release occurred during a major increase of volatility. The GBP/USD has moved 11.1 to 36.2 pips during the last five announcements. However, the September move of 36.2 was an anomaly.
Take into account that the September release occurred at the start of a ECB press conference and Unemployment Claim release. The large move most likely was caused by a combination of factors not the PPI on its own.
On Thursday, the weekly US Unemployment Claims will be out at 12:30 GMT. Since September, the publication caused moves of 15 to 20 pips.
On Friday, the US Retail Sales data is capable of causing slight increases of above normal volatility. However, in most cases the market barely reacts to this data. Namely, there are no sudden asset price and exchange rate adjustments.
The GBP/USD has moved from 10.5 to 25.7 pips on the release.
Click on the link below to find out more about the data releases.
GBP/USD short-term review
Note that the short term forecast has not been changed since Thursday. The only new development was that the 200-hour SMA had approached the 55 and 100-hour SMAs.Due to the rate having no technical resistance as high as the pivot point at 1.3028, the GBP/USD is more likely to find resistance in the 1.3000 level. This level stopped the rate's previous attempts to surge in September.
In the case of the 1.3000 mark holding, the rate could retrace back down to the support of the 55 and 100-hour simple moving averages near the 1.2930 level.
If the 1.3000 level's resistance is passed, the rate would look for resistance in the monthly simple pivot point at 1.3028.
Hourly Chart
On the daily candle chart, on Friday, the 55-day simple moving average was strengthening the resistance of the 1.3030 level.
In the meantime, the 100-day SMA was approaching the rate and supported the 1.2800 level.
Daily chart
Read More: Technical Analysis
Traders remain short
Since Thursday, 58% of trader open position volume on the Swiss Foreign Exchange was in short positions.
Meanwhile, in the 100-pip range around the rate the pending orders were 75% to sell the GBP/USD pair.
Since Thursday, 58% of trader open position volume on the Swiss Foreign Exchange was in short positions.
Meanwhile, in the 100-pip range around the rate the pending orders were 75% to sell the GBP/USD pair.