- The Swiss market is 62% bullish on the pair
- Pending orders in the 100-pip range are set to sell in 57% of cases
- Both UK and US events impact the pair
By the middle of the day the GBP/USD was surging due to USD weakness caused by the Federal Reserve. Meanwhile, traders were expecting the Bank of England Rate announcement.
Latest Fundamental Event
The British Pound appreciated against the US Dollar, following the UK Retail Sales data released on Thursday at 09:30 GMT. The GBP/USD exchange currency rate gained 12 pips or 0.10% during a minute, right after the release. The British Pound continued trading at the 1.2685 area against the US Dollar.
The Office for National Statistics released UK Retail Sales data that came out better than expected of 1.4%, compare to forecasted 0.3%.
The Office for National Statistics notes, "Strong growth of 5.3% in household goods stores provided the largest contribution to overall growth within non-food stores. In November 2018, online sales as a proportion of all retailing exceeded 20% for the first time, with all online retailing accounting for 21.5% of total retailing on a non-seasonally adjusted basis."
Incoming Bank of England at 12:00 GMT
On Thursday, the Bank of England will announce their rate decision. The event has caused moves from 26 to 97 pips since May 2018.On Friday the data releases will continue. During the morning hours, namely, at 09:30 GMT the UK Current Account will be published. This event causes moves from 15 to 45 pips.
The week's data will end at 13:30 GMT. At that time the Canadian Retail Sales and GDP data will be published. Simultaneously the US Durable Goods data sets and Final GDP will be released.
The above mentioned data release will be covered by Dukascopy Analytics. The event can be watched on our YouTube channel.
GBP/USD short term review
A break out, which was speculated in the daily review occurred by the time the combined info was put into this Trading Idea publication.Namely, before the Bank of England announcement the rate managed to pierce the upper trend line of a dominant channel down pattern.
Next target for the rate's surge was the 1.2740 level, where a weekly pivot point was located at.
Hourly Chart
The medium pattern was broken due to the GBP/USD surging. The surge was caused by the information that the US Federal Reserve will not tighten its monetary policy in the future, as much as it was expected previously
Namely, it was announced that in 2019 the central bank intends to hike their interest rates two times not three, as it was previously planned.
If there are no surprises from Bank of England, this indicates that the GBP/USD will surge until the next Brexit shock.
Daily chart
This long sentiment showed up this week. Due to that reason it could clearly be stated that SWFX traders were profiting with green positions.
Meanwhile, trader set up pending orders in the 100-base point range were mostly set to sell the pair. Namely, 57% of trader pending orders were set to sell the GBP/USD.
Most likely the majority of these sell orders are the stop losses and take profits of the long positions. They might create a short retracement in case the GBP/USD reaches the targets of the retail sector.