Due to fundamentals, the GBP/USD plummeted on Tuesday. Although, the decline occurred in the aftermath of the rate passing most technical support levels.
By the time of publication the GBP/USD rate had reached the 1.2420 level.Latest Fundamental Event Report
The Federal Reserve released the US FOMC Meeting Minutes data, where the US policymakers provide in-depth insights into the economic and financial conditions that influenced their vote on where to set interests rates.
According to the official release: "Investors' concerns about downside risks to the economic outlook weighed on financial markets over the intermeeting period. Market participants cited negative news about international trade tensions and, to a lesser extent, soft U.S. and foreign economic data as factors that contributed to these developments.
Nominal Treasury yields posted notable declines and the expected path of policy shifted down considerably over the period. Equity prices declined, on net, and corporate bond spreads widened. However, financing conditions for businesses and households generally remained supportive of economic growth."
Various UK releases
This week will be busy for GBP/USD macroeconomic move traders. Almost each day has a notable data release.
On Tuesday morning, the UK Average Earnings Index was published at 08:30 GMT. The event has caused moves on GBP/USD from 10.2 to 26.5 pips since February.
At 12:30 GMT a significant move could be caused by the US Retail Sales. The event has caused moves from 11.3 to 28.9 pips on the GBP/USD charts.
On Wednesday, the UK CPI will be released at 08:30 GMT. The event has caused since January moves from 15.5 to 23.1 base points.
On Thursday morning, the UK Retail Sales will be published at 08:30 GMT. The Retail Sales have caused moves from 11.5 to 24.5 pips.
For more information watch this week's Economic Calendar Analysis
GBP/USD short-term review
GBP/USD plummeted like a brick on Tuesday. The financial media blamed Brexit fears.Although, it could be spotted that the move most likely had a different fundamental cause that was strengthened by the passing of the support levels and sentiment numbers indicating that the rate was already overbought by the retail sector.
Meanwhile, note that Dukascopy Analytics will investigate the cause of the decline and publish an Expert Commentary publication on our website and send it through the newsletters.
Hourly Chart
On the daily candle chart one can observe that the rate remains in the borders of a descending channel pattern. Namely, the pair is targeting the lower channel line.
The trend line was located at the 1.2390 level on Tuesday as a part of a support cluster made up of the trend line and two pivot points.
Daily chart
Since the middle of Friday's London trading, 72% of open GBP/USD position volume on the Swiss Foreign Exchange was in long positions.
The sentiment increased to 73% on Tuesday. Despite the drop, traders stuck to long positions.
Meanwhile, trader set up pending orders in the 100-pip range were bullish, as 71% of orders were set to buy.
Previously, 58% of orders were set to sell.