The GBP/USD has fallen down. During the midnight hour the currency exchange rate reached below the 1.3040 level.
Moreover, on the daily chart he rate pierced the lower trend line of a dominant ascending pattern. This event signals that a decline will occur in the longer term.
The British Pound traded sideways against the US Dollar, following the UK Average Earnings Index data release on Tuesday at 8:30 GMT. The GBP/USD exchange currency rate lost 4 pips or 0.03% right after the release. The British Pound continued trading at the 1.3090 level against the US Dollar.
Office for National Statistics released the UK Average Earnings Index data that came out as expected of 3.5%. Note, that the UK Unemployment Rate was released at the same time.
Despite Brexit uncertainty, the British labour market is strong. The UK Unemployment Rate has reached its lowest level since 1975. Wage growth remains at the 10-year maximum, and real wage growth has reached the two-year high. Also, wage growth continues to rise faster than the UK inflation rate.
UK data during the mornings
On Wednesday, the UK Consumer Price Index will be released at 08:30 GMT. Afterwards, at 12:30 the Canadian CPI and Trade Balance will be released. This is expected to cause the biggest impact during this week.The data flow will end on Thursday. The European Manufacturing PMIs will be released at 07:15 GMT and 07:30 GMT. Dukascopy Analytics will cover the 07:30 GMT, as at that time the German PMI will be published. The German data causes the biggest reaction on EUR pairs.
An hour later, at 08:30 GMT, the UK Retail Sales will be published.
Last but not least, the Canadian and US Retail Sales will be published at 12:30 GMT. Both data sets combined could cause a move on the USD/CAD of up to 30 pips.
Meanwhile, check out previous data release covers and economic calendar analysis on the Dukascopy Webinars YouTube channel.
GBP/USD short term review
On the hourly chart the GBP/USD was surging on Wednesday. The surge was caused by the lower trend line of a dominant pattern.Although, take into account that this pattern version is drawn by using the low levels of the hourly candles. There are possible various versions for a large scale pattern depending on the method used.
In general, the rate is expected to test the technical resistance levels near 1.3080. At that level three simple moving averages and a weekly pivot point were located at, on Wednesday.
On the other hand, the rate could make another attempt to pass the support of the lower trend line of the ascending pattern.
Hourly Chart
On the daily chart the large scale ascending pattern is drawn differently. This version of the pattern has been broken by the currency exchange rate.
In accordance with the daily chart, the 55-day simple moving average should push the rate down. In that case it should test the support of the weekly S1 at 1.3027.
Daily chart
On Wednesday, the sentiment finally moved. 53% of total open position volume was long.
Meanwhile, the pending orders in the 100-pip range from the rate were still neutral. 51% of the orders were set to sell. The rest of the orders were to buy.