On Thursday, the GBP/USD signalled that the rate has ended its volatile sideways trading by breaking the resistance of the 200-hour simple moving average.
If a surge follows, the rate should reach for the resistance of the weekly R1 of the simple pivot points at 1.2895.
Pound Appreciated on UK Election News
During Monday, November 11, the British Pound appreciated 73 pips or 0.57% against the US Dollar. Note that the British Pound appreciated against other major currencies as well.
The surge was triggered by the announcement made by the Brexit Party leader Nigel Farage. Farage said that his party would not contest the 317-Conservative seats. However, the Brexit Party would focus on unseating opponents of leaving the EU – mostly, the Labour Party and the Liberal Democrats.
The action is likely to raise chances that Boris Johnson would stay the UK Prime Minister.
Economic Calendar
This week, there is only US data left that could impact the GBP/USD currency exchange rate.The US PPI and Core PPI data sets are scheduled to be released on Thursday at 13:30 GMT. This is a minor data release, but still worth taking into account due to the possibility of it creating a move above ten pips.
Since April 2019, the event has caused moves from 9.3 to 14.4 pips.
On Friday, the US Retail Sales data sets will be out at 13:30 GMT. The release has caused moves from 10.5 to 87.4 pips. The last event was an anomaly created by more than one data set being released at the same time. Instead expect a move around 13.7 to 24.3 pips.
Meanwhile, the week's reaction tables have been published. Take a look at the 11.11-15.11 Event Historical Reactions publication.
GBP/USD short-term review
On Thursday morning, the GBP/USD pierced the resistance of the 200-hour simple moving average. It was a signal that a surge is most likely.In the case of a surge the rate would reach the resistance of the 1.2895 level, where a weekly pivot point was located at.
On the other hand, take into account that the rate has been piercing support levels on Wednesday. Those signals did not result in declines. The piercing of the 200-hour SMA might not result in a surge. Instead, the pair could trade sideways.
Hourly Chart
On the daily candle chart, the rate is consolidating after touching the 1.3000 level in October.
The consolidation is occurring in a low angle channel down pattern, which could guide the pair until the end of November.
Daily chart
Meanwhile, trader orders were bullish. In the 100-pip range, 62% of orders were to buy and 38% were to sell.
On Wednesday, the orders were 68% to buy.