After reaching the 1.2980 level on Friday, the GBP/USD began a decline. By the middle of Monday's GMT trading hours, the currency exchange rate had reached the 1.2900 level.
Moreover, the pair had passed most technical support levels and could decline as low as 1.2860.
UK Flash PMIs
The British Pound traded sideways against the US Dollar, following the UK Flash Manufacturing and Services PMIs survey results release on Friday at 09:30 GMT. The GBP/USD exchange currency rate gained 10 pips or 0.08% after the release. The Pound continued trading at the 1.2925 level against the Greenback after the release.
Markit released the UK Flash Manufacturing PMI survey results, which came out better-than-expected of 51.9 compared with the forecast of 49.7.
According to the official release: "Survey respondents noted that receding political uncertainty since the general election continued to translate into higher business activity and greater willingness to spend among clients. That said, the overall rate of new order growth eased from the 19-month peak seen in January amid a weaker expansion across the service economy."
Economic Calendar
During the week there are no notable events that might impact the currency exchange rate. However, some economic calendars have US events listed as high impact.
On Thursday, at 15:30 GMT the US Durable Goods Orders are set to be published. This event has caused moves from 6.2 to 16.8 pips since August.
Moreover, the 16.8 pip move was an anomaly caused by the simultaneous release of other data together with the Durable Goods orders. Without it, the range is from 6.2 to 11.5 pips.
At the same time, the US Preliminary GDP is scheduled to be published. This is the other data set that together with the Durable Goods orders caused a 16.8 pip move. Without the other data, the GDP has caused moves from 8.0 to 16.1 pips.
The week's data is available. Click on the link below to see the historical data tables with the reactions to various events.
GBP/USD short-term review
At the end of last week, the GBP/USD exchange rate raised to the resistance level—the 200-hour SMA at 1.2980. During Monday morning, the rate declined to 1.2900.Note that the currency pair is pressured by the 55 and 100-hour SMAs. Thus, some downside potential could prevail in the market. In this case the pair could gain support of the weekly S1 at 1.2858.
On the other hand, the exchange rate could reverse north from the 1.2880 level in the nearest future. In this case it is unlikely that the rate could exceed the 200-hour SMA.
Hourly Chart
On the daily candle chart, the rate has broken out of the squeeze between the 55 and 100-day simple moving averages. Despite that, the rate is not declining as sharp, as it should occur in theory.
Meanwhile, it could be spotted that the rate had found support in the 1.2850 level on Thursday. This level could stop future declines.
Daily chart
Meanwhile, trader orders were set to buy. In the 100-pip range, 65% of orders were to buy and 35% were sell orders.
Previously, the pending trade orders were 58% to sell.