On Thursday, the GBP/USD exchange rate dropped to the support level at 1.2426. During today's morning, the rate was testing the given level.
If the given support level holds, a reversal north is expected in the nearest future.Latest Fundamental Event Report
The British Pound appreciated against the US Dollar, following the UK Retail Sales data release on Thursday at 08:30 GMT. The GBP/USD exchange currency rate gained 12 pips or 0.10% right after the release. The British Pound continued trading at the 1.2480 level against the Greenback.
The Office for National Statistics released the UK Retail Sales data, which came out better-than-expected of 1.0% compared with the forecast of negative 0.3%.
According to the official release: "In the three months to June 2019, the quantity bought increased by 0.7%, with growth across all sectors except food stores and department stores; however, this was a slowdown from the stronger growth of 1.6% in the three months to May 2019. Online sales as a proportion of all retailing fell to 18.9% in June 2019, from the 19.3% reported in May 2019."
Data from US could cause movements
Today, the US Advance GDP data will be released at 12:30 GMT. The previous data release caused a 22-pip move.
GBP/USD short-term review
During previous trading session, the GBP/USD exchange rate tumbled to the psychological level at 1.2440. During Friday's morning, the rate traded at the given level.Given that the currency pair is pressured by the 55-, 100– and 200-hour SMAs, currently located circa 1.2470, it is likely, that some downside potential could prevail in the market. However, note, that the rate has to surpass the support level at the 1.2426 mark.
If the given support level does not hold, it is expected, that the pair could decline to the weekly S1 at 1.24026. Otherwise, the rate could trade sideways between the given resistance and support.
Hourly Chart
On the daily candle chart, the dominant descending channel pattern's lower trend line caused the recent surge by providing support. The trend line was also strengthened by the weekly and monthly support levels.
Meanwhile, note that the daily simple moving averages are far above the currency pair, indicating that the pair is oversold.
Daily chart
Meanwhile, trader set up pending orders in the 100-pip range were bullish, as 62% of orders were set to buy.