- The Swiss market is 72% bullish on the pair
- Pending orders in the 100-pip range are set to sell in 58% of cases
- UK Conservatives revolt against Theresa May
The Brexit saga continues, as a confidence vote is triggered by UK Conservatives against Theresa May. Meanwhile, it can be seen that technical resistance faces the currency pair at 1.2565.
Latest Fundamental Event
The British Pound appreciated against the US Dollar, following the UK GDP data release on Monday at 09:30 GMT. The GBP/USD exchange currency rate gained 7 pips or 0.06% during a minute, right after the release. The British Pound continued trading at the 1.2690 area against the US Dollar.
The Office for National Statistics released UK GDP data that came out in line with expectations of 0.1%. Note, that the Manufacturing Production was released at the same time with the GDP.
Suren Thiru, head of economics at the British Chambers of Commerce, said, "The latest GDP data is further evidence that the drag effect of persistent Brexit uncertainty and the significant cost pressures faced by consumers and businesses is taking its toll on the UK economy,"
Too much information from Brexit
Before watching any data release that usually impacts the Forex Markets, note that the Brexit fundamentals are overshadowing all data releases. Namely, data causes no reaction in the currency rates during this month.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
During Tuesday's trading session, the currency exchange rate was resisted by the 55-hour SMA to pass through the support levels of the monthly S1 and the weekly S2 . During Wednesday's morning hours, the British Pound was located between the weekly S2 and the weekly S3 to trade at the 1.2537 mark.In regards to the near-term future, most likely, the currency exchange rate will break the resistance of the 55-hour SMA to use the technical indicator as a support level to break through the monthly S2 at 1.2565 to trade near the 1.2555 level.
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 previously bearish, as 68% of trader set up orders were set to sell.
In general, the recent turmoil caused an additional drop. However, traders have increased their long positions.