- The Swiss market is 63% bullish on the pair
- Pending orders in the 100-pip range are set to sell in 63% of cases
- Both UK and US events impact the pair
The volatility of the GBP/USD is still high. During the recent swing upwards the rate reached to the 1.2700 level, from which it bounced off. Meanwhile, note that the move pierced another pattern and the one observable on the hourly chart is a new, adjusted channel down pattern.
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,".
Incoming FOMC rate announcement at 19:00 GMT
On Wednesday, 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.
GBP/USD short term review
During the previous session, the British Pound was supported by the 200-hour simple moving average to trade at the 1.2660 level. On Wednesday, the currency exchange rate was trading at the 1.2640 level.Most likely, the British Pound will keep trading sideways to stay at the 1.2640 level. Moreover, the 55-hour and the 200-hour simple moving averages will support the rate during the day.
On the other side, during today's UK CPI y/y data release at 9:30 GMT, the British Pound could break the resistance of the descending medium pattern line at 1.2680 level to move towards the weekly R1 at the 1.2740 mark.
Hourly Chart
On the daily chart one can see that the dominant descending pattern's upper trend line was pierced during the recent surge up to the 1.2700 mark.
It indicates that the decline of the GBP/USD that has been taking place since November might end. It will be signalled by surging higher and leaving the descending pattern below.
Meanwhile, 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
Meanwhile, trader set up pending orders in the 100-base point range were mostly set to sell the pair.