The GBP/USD was surging on Monday, as the rate pierced through the resistance cluster near the 1.2940 level.
It is expected that the surge will continue and eventually the pair should reach the 1.2960 level, where it would meet with the 200-hour SMA.
The British Pound appreciated against the US Dollar, following the UK Retail Sales data release. The GBP/USD exchange currency rate gained 16 pips or 0.13% right after the release. The British Pound continued trading at the 1.3010 level against the US Dollar.
Office for National Statistics released the UK Retail Sales data that came out better-than-expected of 1.1% compared with forecast –0.3%.
According to analysts, the unexpected increase in the UK retail sales was driven by Brexit uncertainty. It is likely, that consumers are undisturbed by the UK departure from the EU bloc. Consumers have supported the UK economic growth since the referendum.
Central banks will impact GBP/USD
During this week there are various macroeconomic data releases that will impact currency exchange rates. Moreover, there will be a Federal Funds Rate announcement.On Tuesday, the Canadian GDP is expected to cause a significant impact on the CAD pairs at 12:30 GMT.
During Wednesday's trading session there will be two events to watch. First will be the ISM Manufacturing PMI, which will be covered this week for one reason. To once more show that this data release is not significant enough to be on economic calendars, as it causes no increases of volatility.
On the other hand, the opposite might be revealed during the analysis.
On the same day note that the most important event of the month will take place. At 18:00 GMT the US Federal Funds Rate and FOMC Statement will be published. The US Federal Reserve will reveal the future of the US Dollar.
On Thursday, the Bank of England announced their monetary policy data and information at 11:00 GMT. Moreover, the Governor of the bank will speak at 11:30 at a press conference.
On Friday, the US Employment data sets will be published at 12:30 GMT. This event is considered the second most important release for the USD. However, due to three data sets having individual impact on the USD the range of the volatility increase is wide during the data release.
Meanwhile, check out the previous data release covers and economic calendar analysis on the Dukascopy Webinars YouTube channel.
GBP/USD short-term review
During the previous trading session, the GBP/USD exchange rate tested the Fibonacci 23.90% retracement at 1.2938.Given that the rate is supported by the 55– and 100-hour SMAs, currently located at 1.2901 and 1.2925 , it is expected, that bulls could prevail in the market. A possible upside target is the 200-hour SMA at 1.2968.
On the other hand, if the given Fibonacci retracement holds, it is likely, that the currency pair reverses south and targets the lower boundary of the medium-term ascending channel located circa 1.2890.
Hourly Chart
On the daily candle chart note the resistance of the 100 and 200-day SMA. Both of these resistance levels on Monday were located at 1.2967,
These technical levels were expected to provide resistance together with the resistance line that has kept the GBP/USD down since March.
Daily chart
Meanwhile, trader set up pending orders in the 100-pip range were bearish. Namely, 59% of all orders were set to sell.