The resistance of a dominant pattern and the 200-day simple moving average has been broken. The rate is surging higher.
Namely, on Friday, the 1.3150 level was almost touched. In general, the pair was still mostly guided by various fundamental Brexit announcements.
Note that there will be a follow up article to the previous Brexit articles. There was no publication immediately after the vote, as there was a lot of insignificant announcements being made by various politicians. Mostly the politicians were trying to increase their popularity.
The British Pound appreciated against the US Dollar, following the UK Average Earnings Index and Unemployment Rate release on Tuesday at 09:30 GMT. The GBP/USD exchange currency rate gained 7 pips or 0.05% during a minute, right after the release. The British Pound continued trading at the 1.2910 area against the US Dollar.
The Office for National Statistics released UK Average Earnings Index data that came out better-than-expected of 3.4%, compared to the forecasted 3.3%. Note, that the UK Unemployment Rate was released at the same time with the UK Average Earnings Index.
The Office for National Statistics comments: "Latest estimates show that average weekly earnings for employees in Great Britain in nominal terms (that is, not adjusted for price inflation) increased by 3.3% excluding bonuses, and by 3.4% including bonuses, compared with a year earlier".
The week's data is over
The week's macroeconomic data releases are over. Meanwhile take into account that there will be no data releases that are worth covering also on Monday.Instead watch the weekly Economic Calendar Analysis stream at 12:00 GMT on Monday. During the stream the whole week's calendar will be laid out to the participants.
GBP/USD short term review
During yesterday's midnight hours, the currency exchange rate broke the pattern line at the 1.3100 mark. The breakout meant that the United Kingdom and Ireland would agree not to build an outpost in Northern IrelandIn regards to the near-term future, most likely, the British Pound will be supported by the 55-hour simple moving average and the monthly R2 to surge towards the 50.00% Fibonacci retracement level.
However, the expectations might be broken to let the rate to trade between the simple moving averages at the 1.2950 level.
Hourly Chart
On the daily chart it can be seen that the resistance of the dominant pattern was strengthened by the 200-day simple moving average, which also failed to keep the rate lower.
In general, it is expected that large scale patterns will be relevant after the Brexit events. Meanwhile, some trends that last for a couple of months can still be measured.
For example, the broken pattern represented the rates decline since June 2018.
Daily chart
Meanwhile, trader set up pending orders in the 100-base point range were still set to sell. Previously 60% of orders were set to sell. On Friday, 54% of orders were set to sell.
In general, it can be seen that the traders that trade through the Swiss Foreign Exchange are shorting the GPB/USD. Moreover, they are ready to open additional short positions.