- The Swiss market is 69% bullish on the pair
- Pending orders in the 100-pip range are neutral
- Brexit Parliament vote incoming
On Monday, the GBP/USD was plummeting downwards, as no support levels were holding it down from declining. Meanwhile, Dukascopy traders were opening more long positions in the expectations of the Tuesday's Brexit vote at the UK's Parliament.
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".
UK vote on Brexit incoming
On Tuesday, all attention will be on the Brexit vote. It is set to take away attention from all other events in the financial markets.However, note that 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. Although, a reaction just prior to the Brexit vote is unlikely.
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
The volatility of the GBP/USD has once more increased, as the UK Parliament is set to vote on the Brexit deal that Theresa May has agreed upon with the European Union.Meanwhile, from a technical analysis perspective the currency exchange rate is expected to decline, as it has no technical support as low as the 1.2680 mark. At that level the lower trend line of a horizontal pattern is located at.
Although, traders can be sure that during the Parliament debate and the vote, the rate will ignore all technical indicators, as fundamental changes of this scale overpower everything.
Hourly Chart
The descending pattern was adjusted during the last couple of trading sessions on the daily chart. Note that it is still not to be trusted fully, as it represents the decline of the GPB/USD caused by the markets dumping the Pound due to Brexit talks.
If the deal between the UK and the EU gets approved next week or not, the market will react. That will end the decline.
Daily chart
Meanwhile, trader set up pending orders in the 100-base point range were neutral.
In general, traders have picked their sides in regards to the upcoming UK Parliament's vote on the Brexit deal. Most are long, as they expect the deal to be closed.