- The Swiss market is 67% bullish on the pair
- Pending orders in the 100-pip range are set to sell in 67% of cases
- Brexit vote is cancelled
Theresa May has cancelled the vote on the Brexit deal. The event has caused the GBP/USD to plummet as low as the levels just above the 1.25 mark. Although, on Tuesday the currency exchange rate recovered.
Latest Fundamental Event
The British Pound appreciated against the US Dollar, following the UK Services PMI data release on Wednesday at 09:30 GMT. The GBP/USD exchange currency rate gained 22 pips or 0.17% during a minute, right after the release. The British Pound continued trading at the 1.2735 area against the US Dollar.
The Markit released UK Services PMI data that came out lower than expected of 50.4, compare to forecasted 52.5.
Chris Williamson, Chief Business Economist at IHS Markit said, "A sharp deterioration in service sector growth leaves the economy flatlining in November as Brexit concerns intensified. Measured across services, manufacturing and construction, the survey results suggest that the pace of economic growth has stalled. With the exception of July 2016, when business slumped in the immediate aftermath of the EU referendum, November saw the worst performance since February 2013".
Busy week besides Brexit events
On Tuesday the UK Average Earnings Index and Unemployment Rate are set to be published at 09:30 GMT. This data release usually causes a reaction on the GBP/USD from 15 to 30 pips.Meanwhile, on Tuesday the US Producers Price Index will be released at 13:30 GMT. This data release is set to slightly impact all the pairs that involve the US Dollar. For example, the EUR/USD could bounce around ten pips on the release.
On Wednesday, the US Consumer Price Index change will be published at 13:30 GMT. The event is expected to cause around 20 pip reaction on the EUR/USD.
Note that on Wednesday the biggest move that can be caught will occur on the oil price benchmarks. Namely, at 15:30 GMT the US Crude Oil Inventories data release will cause a sudden move of more than one percent.
On Thursday, the attention will be taken by central bank rate announcements. Namely, at 08:30 GMT the Swiss National Bank will publish their rate and at 12:45 the ECB will publish their interest rate.
The last day of the week will have two notable data releases. At 09:00 GMT the European Manufacturing and Services PMI's created by Markit will be published.
Afterwards, the US Retail Sales data sets will be out at 13:30 GMT. The event might cause a 20 pip bounce.
All of the above mentioned data releases will be covered by Dukascopy Analytics. The events can be watched either on the bank's webinar platform or on our YouTube channel.
GBP/USD short term review
After the plummeting caused by the Brexit fundamentals the GBP/USD began a period of recovery, which was set to reach the weekly S1 at 1.2652 mark.The rate could afterwards reach the 1.2680 mark where the 55-hour simple moving average was located at.
On the other hand the currency exchange rate could trade sideways until more news about the Brexit process get announced.
Hourly Chart
The descending pattern of the daily candle chart has not been affected during the recent announcement. Actually, the drop of the GBP/USD was consistent with the pattern, as it represented a bounce off from the upper trend line of the pattern.
In accordance with the pattern, the currency exchange rate is set to continue to decline into the first quarter of 2019.
Daily chart
Meanwhile, trader set up pending orders in the 100-base point range were no longer neutral. 68% of trader set up orders were set to sell.
Traders have not dropped the long positions that they had opened in expectations of a Brexit deal. However, they have set up pending orders that would close these long positions by selling.