On Monday, the GBP/USD traded sideways between the 1.2580 and 1.2600 levels.
The pair was consolidating and waiting for the resistance of the hourly simple moving averages before resuming its decline.
The British Pound depreciated against the US Dollar, following the UK GDP data set release on Monday at 08:30 GMT. The GBP/USD exchange currency rate lost 17 pips or 0.13% right after the release. The British Pound continued trading at the 1.2690 level against the Greenback
Office for National Statistics released the UK GDP data, which came out worse-than-expected of negative 0.4% compared with forecast negative 0.1%. Note, that the UK Manufacturing Production data was released at the same time.
According the official release: GDP growth showed some weakening across the latest 3 months, with the economy shrinking in the month of April mainly due to a dramatic fall in car production, with uncertainty ahead of the UK's original EU departure date leading to planned shutdowns. There was also widespread weakness across manufacturing in April, as the boost from the early completion of orders ahead of the UK's original EU departure date has faded."
UK CPI, Retail Sales and Bank of England announcements this week
This week a central bank forum is taking place in Sintra. Speeches will happen each day until Thursday.
Namely, Draghi speaks at 17:00 GMT on Monday, 08:00 GMT on Tuesday, 14:00 GMT on Wednesday. The first speech will just have the opening remarks. Second one is his speech on policy, and the third one will be the closing remarks.
Bank of England Governor Mark Carney will speak at 14:00 GMT on Tuesday.
In the meantime, this week various central banks will make monetary announcements.
Reserve Bank of Australia will publish its Monetary Policy Meeting Minutes at 1:30 GMT. Note that there will be just the meeting minutes. No rate announcement is taking place.
On Wednesday, at 18:00 GMT the Federal Reserve is making its FOMC Statement, Federal Funds Rate and Economic Projections. Afterwards, at 18:30 GMT the FOMC Press Conference will take place.
On Thursday, Bank of England will make a Rate Statement, Monetary Policy Summary and MPC Official Bank Rate Votes.
Moreover, also on Thursday, the Bank of Japan will make a Monetary Policy Statement and host a Press Conference. However, the time has not been set. Bank of Japan does not set an exact time for their monetary policy events.
In addition, this week there will be notable macroeconomic data releases occurring.
On Wednesday, the UK CPI will be published at 08:30 GMT, and at 12:30 GMT the Canadian CPI will be out. The UK event can cause a move of up to 20 pips, and the Canadian CPI on average has caused moves near 40 base points.
On Thursday, UK Retail Sales will be out at 08:30 GMT. Although, the rate is not expected to cause a big move because the event will happen just before the Bank of England event.
On Friday morning, the European PMIs will get released. Most important of the PMIs will be the German data at 07:30 GMT.
The week will end with the Canadian Retail Sales and Core Retail Sales at 12:30 GMT.
GBP/USD short-term review
At the end of the previous trading week, the GBP/USD exchange rate decreased to the psychological level at 1.2580.On the one hand, the rate could continue to sharp losses, as it should reach the lower boundary of the short-term descending channel located circa 1.2530 within the following trading sessions.
On the other hand, some upside potential could prevail in the market in the short term, and the currency pair could reverse north from the given level. Note, that the rate is pressured by the 55-hour SMA and weekly PP at 1.2644.
Hourly Chart
On the daily candle chart one can observe that the rate is oversold, as the daily simple moving averages were located far above the current currency exchange rate.
Meanwhile, the pair still remains in a large scale descending channel pattern.
Daily chart
On Monday, 68% of total open position volume on the Swiss Foreign Exchange were in long positions.
Meanwhile, trader set up pending orders in the 100-pip range were neutral, as 52% of orders were set to sell.