Fundamentals have moved the financial markets. In general, Jerome Powell stated on Tuesday that the Fed needs more data before cutting interest rates. On Wednesday, various US data sets were released either below expectations or at forecast. This caused the drop. On the GBP/USD charts it has resulted in a surge above the 1.2750 level.
In the meantime, it has been observed that Dukascopy traders were neutral before the events. However, on Thursday a majority was already in short positions.
Economic Calendar
On Friday, the top event of the week will take place. At 12:30 GMT, the United States employment data sets will be published. This release is most certainly going to create volatility.
GBP/USD hourly chart analysis
An extension of the ongoing surge could be slowed down by the weekly R3 simple pivot point at 1.2782, before the pair reaches the 1.2800/1.2820 range. In the past, this range has acted as support and resistance. Higher above, the 1.2860 level could act as resistance, as it is the level that stopped the June 12 surge and marks the June high.On the other hand, a decline of the Pound against the US Dollar would have to pass the supporting trend line that has guided the pair up during the fundamental surge. Below the trend line, the combination of the weekly R2 and the 1.2740 level might turn into support, before the pair returns to the 1.2700 mark.
Hourly Chart
GBP/USD daily candle chart analysis
On the daily candle chart, the combination of the 50, 100 and 200-day simple moving averages held the rate up until the fundamental data revealed the future direction of the pair. A potential target for the currency pair is the 1.2800/1.2850 range.A move above 1.2850 is set to encounter resistance in the 1.2895 level. The 1.2895 level is the 2024 high level. It could once again act as resistance, before the 1.3000 mark is reached.
On the other hand, a bounce off the 1.2800/1.2850 zone might result in the pair once again looking for support in the 50, 100 and 200-day simple moving averages. Further below, note the 1.2500/1.2540 range, which has acted as support and resistance.
In addition, a major channel up pattern has been spotted. It has guided the pair since mid-April, when support was found in the 1.2300 mark.
Read More: Technical Analysis
Traders expect a decline
On Monday, the Dukascopy open positions were neutral, as 51% of all open position volume was in long positions.
Meanwhile, pending orders in the 100-pip range around the rate were 57% to sell the pair.
On Thursday, traders were 75% short. In addition, 59% of pending orders were to sell the pair. Dukascopy traders expected the pair to retrace back down.
Meanwhile, pending orders in the 100-pip range around the rate were 57% to sell the pair.
On Thursday, traders were 75% short. In addition, 59% of pending orders were to sell the pair. Dukascopy traders expected the pair to retrace back down.