The GBP/USD currency exchange rate made a short term surge above the 1.3920/1.3930 zone. The rate bounced off the 1.3940 level and retreated to the 1.3860 level, which provided support.
The volatility is attributed to the announcement of the Bank of England that it would stick to its monetary policy. Initially, a 30 pip move down occurred, which was followed by a 80 pip recovery.
These moves were created by news agencies reporting that the central bank would slow its government bond buying. However, the official statement clearly stated that the program would remain unchanged. Moreover, some reputable news outlets even started publishing analysis of the future scenarios in case of central banks following the example of the BoE reducing easing.
Economic Calendar
On Friday, the rate could move due to the US employment data at 12:30 GMT. Namely, the US Average Hourly Earnings, Unemployment Rate and the Non-Farm Employment Change could cause a move from 22.0 to 55.0 pips.
Next week, on Wednesday, the UK Preliminary GDP is set to be published at 06:00 GMT. This event has caused moves from 8.4 to 23.6 pips since February 2020. The November and February moves have been the lowest.
The rate could move due to the US CPI on Wednesday at 12:30 GMT. The pair has moved from 14.8 to 35.6 pips on the release.
On Friday, the US Retail Sales and Core Retail Sales at 12:30 GMT are bound to move the pair, as the release had moved the pair from 13.6 to 26.3 since December.
Click on the link below to find out more about the data releases of this and other currency exchange rates.
GBP/USD short-term review
In regards to the future, on Friday morning the rate appeared to be making another attempt to pass the resistance of the 1.3920/1.3930 zone.If the zone fails to hold, a surge to the 1.3975 level could occur. On the other hand, a potential decline could reach as low as the mentioned 1.3860 mark.
Hourly Chart
GBP/USD daily chart's review
The support of the 1.3800 mark was enough for the rate to return to trading above the 55-day simple moving average. It was spotted on Wednesday that the SMA had resumed to provide support to the currency exchange rate.Daily chart
On Friday, traders were short, as 57% of trader open position volume on the Swiss Foreign Exchange was in short positions.
On Thursday, the sentiment was 54% short,
Meanwhile, in the 100-pip range around the rate the pending orders were 52% to sell. Previously, 76% were to sell.