On Monday morning, in the aftermath of reaching the 1.2740 level the GBP/USD dropped suddenly down to the 1.2680 level.
Moreover, it could be observed that, if the 1.2680 does not hold, the rate will have no technical support as low as 1.2609.
The British Pound traded sideways against the US Dollar, following the UK Retail Sales data release on Friday at 08:30 GMT. The GBP/USD exchange currency rate lost 5 pips or 0.04% right after the release. The British Pound continued trading at the 1.2690 level against the Greenback.
Office for National Statistics released the UK Retail Sales data, which came out better-than-expected of 0.00% compared with forecast –0.1%.
According to the official release: "In the three months to April 2019, the quantity of goods bought (volume) in retail sales increased by 1.8% when compared with the previous three months, with strong growth in non-store retailing, which reached a record high of 9.4%."
No GBP/USD affecting data this week
This week there are three notable events on the economic calendar that traders will watch.On Wednesday, the markets will watch the Bank of Canada Rate Statement at 14:00 GMT. This event has caused since October 2018 moves from 67 to 93 base points on the USD/CAD.
It is currently the top creator of sudden volatility in the markets.
On Thursday, at 12:30 GMT the US Preliminary GDP will be published. This event, which is considered and shown on the calendars as a top mover, has not caused notable moves.
Since November 2017 this event has caused on the EUR/USD moves from 6.8 to 11.9 pips during the five minutes after the release. Note that a move below ten pips on the EUR/USD during five minutes happen often without any data being published.
The week will end with the Canadian GDP publication at 12:30 GMT. This event has caused moves from 21 to 64 pips since December.
GBP/USD short-term review
At the end of the previous week, the GBP/USD exchange rate extended gains and reached the 200-hour moving average at the 1.2739 mark. However, as apparent on the chart, the rate did not surpass the given resistance.Note, that the currency pair also reversed south from the upper boundary of the short-term descending channel, thus, it is likely, that some downside potential could prevail in the market. However, note, that the pair has to surpass the 55– and 100-hour SMAs located circa 1.2680.
If the given support holds, it is expected, that the rate could reverse north and re-test the upper channel line. It is unlikely, that the rate could surpass the given 200-hour SMA.
Hourly Chart
On the daily candle chart, the GBP/USD has broken the lower trend line of a descending channel pattern.
The rate continued the decline after the braking of the pattern.
Meanwhile, the rate has fallen fall below the daily simple moving averages, which is a clear signal that the rate has been oversold.
Daily chart
Traders have not closed their long positions despite the Monday's decline.
Meanwhile, trader set up pending orders in the 100-pip range were almost neutral, as 52% of orders were set to sell.