The GBP/USD has reached even lower than previously expected. Instead of touching the 1.2945 mark, the currency rate has reached as low as the monthly pivot point at 1.2925.
The decline occurred in a sharp drop during a period of a couple of hours.
Meanwhile, by the middle of Wednesday's trading the pair was signalling that it might recover back up to the 1.3000 level.
The Federal Reserve releases US FOMC Meeting Minutes where fed officials provide in-depth insights into the economic and financial conditions that influenced their vote on where to set interest rates.
"In light of global economic and financial developments and muted inflation pressures, the Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes," the statement said.
"In light of global economic and financial developments and muted inflation pressures, the Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes," the statement said.
Bank of England on Thursday
The major event of the week will be the Bank of England rate announcement on Thursday. The rate announcement and the results of the central bank's monetary policy vote will be published at 12:00 GMT.Another notable event during this week will be the Canadian Employment data release on Friday at 13:30 GMT.
Both of these events are scheduled to be covered by Dukascopy Analytics on our Dukascopy Webinars YouTube channel. The streams start ten minutes before the data release.
For more detailed info and a chance to ask questions watch the weekly calendar analysis by clicking on the link below.
GBP/USD short term review
During Tuesday's trading session, the monthly pivot point at 1.2992 stopped the rate from the fall to place the rate at the 1.2950 mark.In regards to the near-term future, it is expected that the currency exchange rate will trade between the monthly PP at 1.2992 and the 62.30% Fibonacci retracement level. Most likely, the rate will end today's trading session at the 1.2850 level.
On the other hand, the rate could be supported by the weekly S2 at 1.2944 to keep the British Pound to move sideways at the 1.2950 level.
Hourly Chart
On the daily chart one can clearly observe that the pair has retreated downwards to a strong support cluster in the zone from 1.2900 to 1.2945.
Besides the 100-day simple moving average at 1.2900 the other support levels were already observable on the hourly chart.
Meanwhile, note that the 55-day SMA was approaching the currency exchange rate from the bottom at the 1.2800 level. If the pair continues to decline, the 55-SMA and the weekly S3 will provide combined support at 1.2845.
Daily chart
Traders have continued to take profits from the decline of the pair.
Meanwhile, trader set up pending orders in the 100-base point range had become almost neutral. 52% of trader orders for the GBP/USD were set to buy.
The traders, which were not knocked out of their positions on Monday by the sudden jump of volatility of the rate to the upside, have profited from the recent decline.