On Thursday morning, the GBP/USD traded below the 1.2700 level. The rate had continued to fluctuate between the support of the weekly pivot point at 1.2669 and the psychological resistance of 1.2700.
In general, the rate was expected to get squeezed in between the support of the mentioned pivot point and the 200-hour simple moving average and the resistance of the 55 and 100-hour simple moving averages that on Thursday morning was located above the 1.2700 level.
The British Pound depreciated against the US Dollar, following the UK Monetary Policy Summary and Official Bank Rate data releases on Thursday at 11:00 GMT. The GBP/CAD exchange currency rate lost 29 pips or 0.23% right after the release. The British Pound continued trading at the 1.2690 level against the Greenback.
The Bank of England released the UK Monetary Policy Summary data, where the UK policymakers provided in-depth insights into the economic and financial conditions that influenced their vote on maintaining the Official Bank Rate unchanged. Note, that MPC Official Bank Rate Votes data was published at the same time.
According to the official release: "The Committee continues to judge that, were the economy to develop broadly in line with its May Inflation Report projections that included an assumption of a smooth Brexit, an ongoing tightening of monetary policy over the forecast period, at a gradual pace and to a limited extent, would be appropriate to return inflation sustainably to the 2% target at a conventional horizon. The MPC judges at this meeting that the existing stance of monetary policy is appropriate."
US GDP and UK Current Account
On Thursday, the US Final GDP will be published at 12:30 GMT. This is the least important GDP of the three quarterly publications of the US GDP. Since March 2018 this event has caused moves from 12.0 pips to 52.0 pips.
On Friday, the UK will have data, as the UK Current Account will be announced at 08:30 GMT. This event has caused moves from 11.5 pips to 44.3 since March of 2018.
The full review of all of the notable events is available in video on the Dukascopy Webinars YouTube channel.
GBP/USD short-term review
On Thursday, the GBP/USD was trading between the support of the weekly PP at 1.2669 and the psychological resistance of the 1.2700.In the near term future, the rate was expected to get squeezed in between the support of the pivot point, which soon will be strengthened by the 200-hour SMA, and the resistance of the 55 and 100-hour simple moving averages, which were located just above the 1.2700 level.
After the squeeze a break out is set to occur. Watch out for clues for the direction of the break out and beware from false break out signals.
Hourly Chart
On the daily candle chart one can observe that the recent surge has bene consistent with the long term descending channel pattern.
In addition, on the daily chart the rate can no longer be considered oversold, as the 55-day simple moving average had closed in on the rate and approached the weekly R1 at 1.2830 strengthening its resistance.
Daily chart
On June 21, 70% of open position volume was in long positions at the Swiss Foreign Exchange.
On Monday, 68% of volume was in long positions. On Tuesday, the sentiment was 65% long, and by the middle of Wednesday 64%.
The trend of closing long positions continued on Thursday, as 62% of GDP/USD position volume was in long positions.
Meanwhile, trader set up pending orders in the 100-pip range were bearish, as 70% of orders were set to sell. The amount of sell orders had decreased from 76% on Wednesday.
Due to that reason it was assumed on Thursday that the selling trend would continue.