Unsurprisingly the GBP/USD has made another sudden jump upwards before continuing to decline. This time just after the decline caused by the Bank of England the rate began to surge.
Our analysts looked into the news feeds at the time and it was found out that there were news that were considered positive in regards to the Brexit deals.
Namely, Theresa May stated that she had constructive talks with the EU. This triggered buying, which caused the rate to gain.
However, by the middle of Friday, the pair was back at 1.2925.
The Federal Reserve releases US FOMC Meeting Minutes where fed officials provide in-depth insights into the economic and financial conditions that influenced their vote on where to set interest rates.
"In light of global economic and financial developments and muted inflation pressures, the Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes," the statement said.
Watch out for UK GDP on Monday
The Canadian Employment data release will occur today at 13:30 GMT. A move of 35 to 80 pips is expected on the USD/CAD during the release.Meanwhile, note that early on Monday at 09:30 GMT the UK GDP and Manufacturing Production will be released. This event will occur before the weekly calendar analysis stream.
Both of these events are scheduled to be covered by Dukascopy Analytics on our Dukascopy Webinars YouTube channel. The streams start ten minutes before the data release.
For more detailed info and a chance to ask questions watch the weekly calendar analysis by clicking on the link below .
GBP/USD short term review
On the hourly chart one can clearly observe the increase of volatility caused by the latest Brexit news. Our analysts previously warned that such events are most likely going to occur and the increase of volatility will cause the activation of pending orders.Meanwhile, the rate had returned on Friday to the previous levels before another fundamental move began.
In general, technical traders are advised to stay out of this pair, as each fundamental announcement crashes technical charts by introducing new information into the financial markets about the future demand for the GBP.
Hourly Chart
On the daily, one can see that the 100-day SMA at 1.2900 was pierced during the Bank of England's rate announcement. It reveals that the support of the SMA cannot stop a fundamental move.
Meanwhile, note that the 55-day SMA was approaching the currency exchange rate from the bottom at the 1.2810 level. If the pair continues to decline, the 55-SMA and the weekly S3 will provide combined support at 1.2845.
In addition, in the case of a surge the rate is set to face the resistance of the 200-day simple moving average together with the weekly S1 at 1.3014. Daily chart
By the middle of Friday's trading 52% of trader were short on the pair.
Meanwhile, trader set up pending orders in the 100-base point range remained neutral for a third consecutive trading session. 53% of trader orders for the GBP/USD were set to buy.
In general, traders were already knocked out from their short positons on Monday. The first bounce upwards triggered stop losses. Since then the sentiment has been almost neutral.