During Friday morning, the GBP/USD exchange rate was trading at the monthly R1 at the 1.2314 mark.
Note that the rate is supported by the 55-, 100- and 200-hour moving averages. Thus, some upside potential could prevail in the market.
British Pound depreciates on Brexit tensions
On Monday, September 2, the British Pound depreciated 105 pips or 0.86% against the US Dollar. Note, that the Pound also depreciated against other major currencies.
The reason for the drop is the news that the British opposition lawmakers are planning to propose legislation to oblige the UK Government to suspend Brexit.
The UK Prime Minister Boris Johnson claimed that he would purge any member of the UK Parliament who would vote against the Government on Brexit.
Economic Calendar
Today, US employment data will be published. The event will have three numbers being revealed – the Average Hourly Earnings, Non-Farm Employment Change and Unemployment Rate.
Due to each of the numbers impacting the rate differently by pushing the value of the USD up or down and with a different strength, the event has a wide range. Namely, since April the GBP/USD has moved from 14.8 to 34.1 pips due to the US labour data.
Next week there are couple data releases both from the UK and the US that could move the GBP/USD exchange rate.
On Monday, September 9, the UK Manufacturing Production and GDP data releases will be published at 8:30 GMT. Since April, the GBP/USD pair has moved from 9.2 to 39.2 pips due to those data releases.
On Tuesday, September 10, the UK Employment data set will be published at 8:30 GMT. Previously, the release caused a sixteen-pip move.
On Wednesday, September 11, the US Producer Price Index data will be released at 12:30 GMT.
On Thursday, September 12, the US Consumer Price Index data will be published at 12:30 GMT. Last data release caused a nineteen-pip move.
On Friday, September 13, the US Retail Sales data will be published at 12:30 GMT. Last time, the GBP/USD exchange rate moved for almost 19 pips.
GBP/USD short-term review
During the previous trading session, the GBP/USD exchange rate raised to the 1.2350 level. During Friday morning, the rate was testing the support level formed by the monthly R1 at 1.2314.Note that the currency pair is supported by the 55-, 100– and 200-hour SMAs, currently located in the 1.2172/1.2258 range. Thus, it is likely that some upside potential could prevail in the market. In this case, the pair has to surpass the weekly R2 at 1.2376.
If the given resistance level holds, it is likely that the British Pound could trade sideways against the US Dollar. It is unlikely that bears could prevail, and the rate could drop lower than the weekly PP at 1.2206.
Hourly Chart
On the daily candle chart it is seen that the GBP/USD currency pair is testing the 55-day moving average at 1.2342.
If the given resistance holds, it is likely that a reversal south could occur in the nearest future.
Daily chart
Read More: Technical Analysis
Traders remain long
On Friday morning, SWFX sentiment was 57% long.
Meanwhile, trader set up pending orders in the 100-pip range were slightly bearish, as 57% of orders were set to sell and 43% were to sell.
On Friday morning, SWFX sentiment was 57% long.
Meanwhile, trader set up pending orders in the 100-pip range were slightly bearish, as 57% of orders were set to sell and 43% were to sell.