By the middle of Tuesday's London trading session, the Brexit vote at the UK Parliament had not occurred. In the meantime, one can look at the technical outlook prior to the vote.
In addition, Dukascopy Analytics have published another article explaining the Brexit situation. In general, the article lays out the possible outcomes of the vote.
The British Pound appreciated against the US Dollar, following the UK GDP data release on Friday at 09:30 GMT. The GBP/USD exchange currency rate gained 6 pips or 0.05% during a minute, right after the release. The British Pound continued trading at the 1.2765 area against the US Dollar.
Rob Kent-Smith, the head of national accounts at the Office for National Statistics revealed, "Growth in the UK economy continued to slow in the three months to November 2018 after performing more strongly through the middle of the year. Accountancy and housebuilding again grew but a number of other areas were sluggish,"
All attention on Brexit
Fundamental data traders will mostly pay attention this week to the Brexit vote at the UK's Parliament. Meanwhile, macro release traders will still have events to watch and trade.On Tuesday, at 13:30 GMT the US Producers Price Index will be published. The release will be covered mainly due to Dukascopy Analytics sticking to the rule – If it causes 10 pips, we over it.
US PPI causes mostly just above ten pip moves. Enough to trigger a trailing stop loss, but not enough to actually change a strategy.
On the same day note that the ECB President Draghi will testify before the European Parliament in Strasbourg. Some of his comments might cause an increase of volatility in the EUR pairs.
On Wednesday, at 09:15 action will begin in the UK. Namely, at that time the Bank of England Governor Carney will report to the UK treasury about his actions. Most likely he will report how he dealt with Brexit volatility and lay out the bank's future scenario in regards to the results of the Parliament vote on Tuesday.
Simultaneously to the reporting of Carney, the UK CPI will be published. This data release usually causes moves of around 20 base points. However, this time Dukascopy Analytics expect all attention to be taken away by the Carney's report.
Besides a speech at the G20 Meetings by Bank of Japan's Governor Kuroda at 03:20 GMT, there is nothing on Thursday to watch.
On Friday, two data releases will be covered by Dukascopy Analytics.
At 09:30 GMT the UK Retail Sales will be published. Around 10-40 base point move can be expected during the event.
The biggest event of the will occur at 13:30. The Canadian CPI will be published. On the USD/CAD there are 30 pip moves even when it hits the forecast. When the data is different there have been 40-85 pip moves.
GBP/USD short term review
During the previous trading session, the rate traded between the 62.20% Fibo and the weekly PP as it was expected. On Tuesday, the currency exchange rate was resisted to 1.2860 by the upper boundary of the dominant pattern line at the 1.2916 mark.Today is a critical day for the United Kingdom history due to the Parliament Brexit Vote which will occur at any time during the day.
However, the Dukascopy Analytical Department thinks, that the British Pound might depreciate against the US Dollar to pass through most of the technical indicators to trade below the monthly pivot point at the 1.2650 level.
Hourly Chart
On Tuesday, from a technical perspective on the daily chart the GBP/USD was facing a strong resistance cluster at the 1.2900 mark. Namely, it consisted of the weekly and monthly R1 and the 100-day SMA.
Although, all technical will be ignored most likely by the selling or buying that will occur during the day immediately after the UK Parliament votes.
Daily chart
Meanwhile, trader set up pending orders in the 100-base point range were set to sell the pair in 58% of cases.
In general, it could be seen that although the long positions slightly dominated, pending sell orders were set up to take advantage of a sudden decline.