- The Swiss market is 64% bullish on the pair
- Pending orders in the 100-pip range are set to sell in 61% of cases
- Busy week for fundamental traders will start on Wednesday
The previous squeeze of the GBP/USD has ended with a surge upwards. On Tuesday, the surge had reached the resistance of a dominant pattern at 1.2660. The rate was expected to decline after bouncing off the resistance line.
Latest Fundamental Event
The Census Bureau released US Retail Sales data that came out better than expected of 0.2%, compare to forecasted 0.1%. Note, that the US Core Retail Sales was released at the same time with the US Retail Sales.
Andrew Hunter, the senior U.S. Economist at Capital Economics said, "Along with the continued strength of the labor market, the boost to real incomes from the recent plunge in gasoline prices appears to be providing a big support to spending growth, which could continue for a few more months,".
Live Cover: US Retail Sales
Read More: Fundamental Analysis
UK data starts the week on Wednesday
Until Wednesday there are no notable data releases scheduled to occur that might impact any of the major pairs or gold.On Wednesday, the macroeconomic data releases will start at 09:30 GMT with the UK Consumer Price Index. The event is expected to cause at least a 20 base point move.
On the same day at 13:30 GMT the Canadian will publish the Consumer Price Index data sets. During the last half a year the data release has caused fluctuations of at least 40 pips.
Afterwards at 19:00 GMT the event of the week will take place. Namely, the FOMC Statement and the Federal Funds Rate will be published. The Federal Reserve is expected to hike the US central banks interest rate to 2.5% from 2.25%.
In theory the event is expected to cause a US Dollar surge, which would beat the top pairs downwards. This year the interest rate hikes have caused moves of at least 40 base points.
On Thursday, all attention will be paid to events in the UK. Namely, at 09:30 GMT the UK Retail Sales are expected to cause a move from 10 to 40 pips.
Afterwards, the Bank of England will announce their rate decision. The event has caused moves from 26 to 97 pips since May 2018.
On Friday the data releases will continue. During the morning hours, namely, at 09:30 GMT the UK Current Account will be published. This event causes moves from 15 to 45 pips.
The week's data will end at 13:30 GMT. At that time the Canadian Retail Sales and GDP data will be published. Simultaneously the US Durable Goods data sets and Final GDP will be released.
The last event is too complex to explain it shortly. Instead, state your questions at the weekly Monday's economic calendar stream at 12:00 GMT.
The above mentioned data release will be covered by Dukascopy Analytics. The event can be watched on our YouTube channel.
More content: Youtube Channel
GBP/USD short term review
The British Pound was trading sideways to stay at the 1.2600 level during the previous session. On Tuesday morning, the currency exchange rate was resisted by the 200-hour simple moving average to trade at the 1.2633 mark.The British Pound will trade downwards during the day. Most likely, the rate will get resisted by the 200-hour SMA to pass through the most of the technical indicators to trade below to the monthly S1 at 1.2596.
On the other side, the British Pound could appreciate against the US Dollar to break the descending medium pattern line at 1.2600 mark to trade towards the weekly R1 at the 1.2740 mark.
Hourly Chart
The dominant pattern, whose trend line is holding the GBP/USD from surging is better observed on the daily chart.
Note that on the daily chart the trend line stands as a single resistance level, as all simple moving averages are high above the currency exchange rate, indicating that it has been sold heavily.
Daily chart
Read More: Technical Analysis
Traders of the Swiss Foreign Exchange are long
On Monday, 66% of trader open positions on the Swiss Foreign Exchange were long on the GBP/USD. By the middle of Tuesday's trading session the sentiment had decreased to 64%.
Meanwhile, trader set up pending orders in the 100-base point range had not changed and were mostly set to sell the pair. Namely, 63% of trader pending orders were set to sell the GBP/USD.
Meanwhile, trader set up pending orders in the 100-base point range had not changed and were mostly set to sell the pair. Namely, 63% of trader pending orders were set to sell the GBP/USD.