Before the drop that was caused by the FOMC, the GBP/USD reached the 1.3100 level.
By the middle of Thursday's trading session the pair managed to find support in the monthly pivot point and the 55-hour simple moving average near 1.3030.
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.
Bank of England on Thursday
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
After the FOMC announcement that beat down the GBP/USD the rate found support above the 1.3030 level. The support was found in the monthly PP at 1.3033 and the 55-hour simple moving average at the same level.In general, the rate was expected to continue to surge until it reaches the weekly second resistance level of the simple pivot points at 1.3090.
On the other hand, the rate might trade sideways between 1.3050 and 1.3090 until the 55-hour SMA pushes the pair through the pivot point.
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
On Thursday, 51% of all open position volume was in short positions.
Meanwhile, trader set up pending orders in the 100-pip range were bearish. Namely, 58% of all orders were set to sell.
In general, traders were neutral, but ready to sell, if the pair starts moving.