Namely, the renewal of US-China trade talks resulted in a surge of the US Dollar. Latest Fundamental Event Report
The British Pound traded sideways against the US Dollar, following the UK Current Account data release on Friday at 08:30 GMT. The GBP/USD exchange currency rate gained 7 pips or 0.06% right after the release. The British Pound continued trading at the 1.2685 level against the Greenback.
Office for National Statistics released the UK Current Account data, which came out better-than-expected of negative 30.0B compared with forecasted negative 32.0B.
According to the official release: "The UK financed its current account deficit mainly through other investment, where UK investors withdrew overseas deposits while overseas investors increased their deposits with UK monetary financial institutions."
US data in focus this week
On Monday, the markets will look at the ISM Manufacturing PMI data at 14:00 GMT. This event has caused moves on the GBP/USD since February from 13.2 to 19.2 pips.
On Wednesday, the ISM Non-Manufacturing PMI will be published at 14:00 GMT. The data release has caused moves from 11.8 to 22.6 pips on the GBP/USD charts.
For this pair the week will end with the US Employment data sets – the Average Earnings, Unemployment Rate and Non-Farm Employment Change.
On the GBP/USD charts this event has caused moves in a range from 14.8 to 27.7 pips since February.
GBP/USD short-term review
During the previous trading session, the GBP/USD exchange rate reversed south from the upper boundary of the short-term descending channel at 1.2730. During Monday's morning, the rate was testing the support formed by the weekly PP at 1.2648.If the given support level holds, it is likely, that a reversal north could occur in the nearest future. However, it is unlikely, that the British Pound could exceed the 1.2700 level due to the resistance formed by the 55-, 100– and 200-hour SMAs.
Otherwise, it is expected, that the currency pair could maintain its decline. A possible downside target is the lower channel line located in the 1.2600/1.2620 range.
Hourly Chart
On the daily candle chart one can observe that the rate remains in the borders of a descending channel pattern. Namely, the rate is recovering in its borders.
Note that a possible surge of the rate might face the resistance of the 55-day simple moving average near 1.2800.
Daily chart
Since Friday, 64% of open position volume on the Swiss Foreign Exchange was in long positions.
Meanwhile, trader set up pending orders in the 100-pip range were bearish, as 72% of orders were set to sell. They also had not changed since Friday.
In general, traders were long on the pair, but had close by take profits and stop losses.