By the middle of Thursday's London trading session, the GBP/USD had reached the 1.3150 mark.
If the surge continues, the rate should aim first at the 1.3200 level and afterwards at a pivot point at 1.3244.
Fundamentals Crash US Dollar
Since Monday, December 2, the US Dollar has been depreciating.
Most likely, the Greenback is pressured by various fundamental events. Firstly, on Monday, the World Trade Organization rejected the EU claims for providing subsidies to Airbus. Thus, the US could increase tariffs on more European goods.
Also, on Monday, Cuba took another step to end dual monetary system, and two department stores in Havana began to give change only in pesos.
Moreover, the US President Donald Trump announced tariffs on the US steel and aluminum imports from Brazil and Argentina. Trump claimed that the given countries control devaluation of their currencies, and it was harmful for the US farmers.
According to analysts, the Greenback was also pressured, as the US factory activity has been declining for four months. Also, the US construction spending dropped in October.
On Tuesday December 3, the EU representatives said that the union was ready to reciprocate in case the US would impose tariffs on the French products worth $2.4B.
All these events could negatively affect the demand for the US Dollar, as trade flows could decrease significantly.
Economic Calendar
On Friday, the US Employment data sets will be published at 13:30 GMT. The event consists of three numbers – Average Hourly Earnings, Non-farm Employment Change and Unemployment Rate. Since July, moves from 21.7 to 51.3 pips have been caused by the release.Meanwhile, the week's scheduled event historical data tables have been published. Click on the link below to read the article.
GBP/USD short-term review
By midday on Thursday, the GBP/USD reached the 1.3150 level, which provided psychological resistance.If the rate passes this level and the surge continues, the GBP/USD would first aim at the 1.3200 level and afterwards at a pivot point at 1.3244.
On the other hand, the currency exchange rate could consolidate by trading sideways or declining to the support of the weekly and monthly pivot points near 1.3110.
Hourly Chart
On the daily candle chart, the rate continues to surge in the borders of a long term channel up pattern. The resistance line of the pattern on Thursday was located at the 1.3600 level.
Daily chart
The short position volume had been growing throughout the week.
Meanwhile, trader orders were set to sell. In the 100-pip range, 76% of orders were sell and 24% were to buy.
Previously, 95% of orders were to sell.
In general, traders have continued to open short positions despite the rate surging higher. The Swiss traders expect a reversal of the pair's direction.