As expected, the GBP/USD has reached the 1.3000 level. Moreover, it has surged above it and was just below the 1.3080 level on Wednesday morning.
At the 1.3000 level the rate will reach the resistance of a large scale descending channel and the weekly R1.
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.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 check whether this data release is significant enough to be on the economic calendars.
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
On Tuesday, the GBP/USD currency pair skyrocketed to the monthly PP at 1.3033. During Wednesday's trading session, the pair headed to the resistance level formed by the weekly R2 at 1.3090.If the given resistance does not hold, it is expected, that the exchange rate could continue to extend gains. A possible upside target is the resistance level located at the 1.3119 mark.
Otherwise, it is likely that the rate could trade sideways between the given resistance and support. It is unlikely, that bears could prevail in the market, and the British Pound could slump lower than the weekly R1 at the 1.3006.
Hourly Chart
On the daily candle chart, the 100 and 200-day simple moving averages failed to keep the rate down. Moreover, the descending trend line, which kept the GBP/USD down since March has been broken.
Meanwhile, take into account that the 55-day SMA was strengthening the resistance of the weekly R2 at 1.3090.
Daily chart
By the middle of Wednesday's trading session the sentiment had become neutral, as 51% of open position volume was in long positions.
Meanwhile, trader set up pending orders in the 100-pip range were bearish. Namely, 66% of all orders were set to sell.