- The Swiss market is 59% bullish on the pair
- Pending orders in the 100-pip range are 58% set to buy
- Brexit politics beat the rate down 250 pips
The government of the United Kingdom is failing on Thursday. Due to the event that was caused by differences over Brexit the rate declined 270 base points before the middle of the day.
Latest Fundamental Event
The British Pound depreciated against the US Dollar, following the UK CPI data released on Wednesday at 09:30 GMT. The GBP/USD exchange currency rate lost 18 pips or 0.14% during a minute, right after the release. The British Pound continued trading at the 1.2965 area against the US Dollar.
The Office for National Statistics released UK CPI data that came out lower than expected of 2.4%, compare to forecasted 2.5%.
The Office for National Statistics noted, "The large downward contributions to the change in the 12-month rate from food and non-alcoholic beverages, clothing and footwear, and some transport elements were offset by upward contributions from rising petrol, diesel and domestic gas prices".
Fundamental UK data is over this week
Thursday will be the last day with a notable data release. At 13:30 GMT the US statisticians will publish their retail sector data.For more in-depth analysis of this week's fundamental economic events watch the weekly Monday's Poking the Economic Calendar webinar, which is live each Monday at 12:00 both on Dukascopy telefision and YouTube.
GBP/USD short term review
The GBP/USD plummeted due to the UK's government announcements. Although, from a technical perspective the currency exchange rate remains in the borders of a channel down pattern.Namely, the lower trend line of the descending pattern stopped the rate at 1.2750. Watch that level. If it gets passed, the rate will fall down to 1.2680, or the rate can rebound back up to 1.2820.
Hourly Chart
On the daily chart the descending pattern has been added. Note that previously the reveal of the medium descending pattern was already expected.
In addition, note that the Brexit bounce downwards occurred consistently with the rate meeting additional resistance levels on the daily chart. Namely, the 55 and 100-day simple moving averages were located just below the 1.3040 level and provided resistance on Thursday.
Daily chart
Pending orders in the 100-base point range are bullish, as 55% of them are to buy. The orders have not changed since Wednesday.
Traders are still bullish, as they are most likely expecting a move upwards after this decline. However, it can be stated that the traders are long term oriented, as the recent drop of 200 pips most likely has cleaned out all of the short term long scalpers.