On Monday, the GBP/USD bounced off the resistance provided by the 1.3300 level. By the middle of London trading session the rate had declined down to the 1.3215 level.
In general, from a technical perspective the pair should stop at 1.3215, as the 100-hour simple moving average and the weekly pivot point were providing technical support at that level.
The British Pound depreciated against the US Dollar, following the UK GDP data release on Tuesday at 09:30 GMT. The GBP/USD exchange currency rate lost 32 pips or 0.25% during a minute, right after the release. The British Pound continued trading at the 1.3180 area against the US Dollar.
The Office for National Statistics released UK GDP data that came out better-than-expected of 0.5% compare to forecasted 0.2%. Note, that the Manufacturing Production was released at the same time with the GDP.
Suren Thiru, The Head of Economics at the British Chambers of Commerce, said: "The data for the longer three-month period recorded an economy that was continuing to slow under the weight of uncertainty over Brexit and weakening global trading conditions."
Busy week for fundamental events
This week will be busy for fundamental announcement traders. Both the central banks and various statistics offices are set to make various announcements.The data releases will start on Tuesday. At 09:30 GMT the UK Average Earnings and Unemployment Rate will be published. The data sets are set to be published in the background of another Brexit vote. Read about that in the articles section.
On Wednesday, at 09:30 GMT the UK Consumer Price Index will be released. This data release also is expected to be ignored by the markets due to the Brexit politics.
On the same day, at 18:00 GMT the Federal Reserve will publish their FOMC Statement, Economic Projections and the Federal Funds Rate. Moreover, the event will be followed by the FOMC Press Conference.
This event is above all else during this week, as the FOMC sets the value of the US Dollar. In general, the rest of the world's central banks just adapt to the Federal Reserve.
On Thursday, all attention will be on the UK events. At 09:30 GMT the UK Retail Sales will be published. Afterwards, at 12:00 GMT the Bank of England will announce their official Bank Rate and Monetary Policy Summary. The BoE in general is expected to react to the recent Brexit developments and the Federal Reserve.
On Friday, there will be two notable data releases. At 08:30 GMT the German Markit PMIs will be released. They are expected to cause a significant impact on the EUR pairs.
The last event of the week will be the Canadian CPI and Core Retail Sales release at 12:30 GMT.
For more information watch this week's economic calendar analysis stream.
GBP/USD short term review
During Friday's trading session, the 55-hour simple moving average supported the British Pound to trade sideways at 1.3250. On Monday morning, the rate passed the support level of the 55-hour SMA to be located at the 1.3240 mark.In regards to the near-term future, most likely, the support levels of the 100-hour simple moving average and the weekly pivot point at 1.3214 might push the rate to surge towards the 1.3350 level.
On the other hand, the rate could pass through the weekly pivot point at 1.3214 to trade towards the 50.00% Fibonacci retracement level at the 1.3163 mark.
Hourly Chart
On the daily chart the recent moves still occur in the borders of a large scale ascending channel pattern.
However, it is highly likely that the pattern will get broken, as soon as a clear result of the Brexit situation is revealed.
Daily chart
Meanwhile, the pending orders remained neutral. In the 100-pip range around the rate of all the set up sell and buy orders 52% orders were set to buy.