The GBP/USD has reached the target set yesterday. However, there is an issue.
As the GBP has already done in the recent history, the rate suddenly increased volatility to the opposite side by jumping in this case before reaching the target.
Meanwhile, on Tuesday it was observable that the rate has no technical support as low as the 1.2945 level. That level would be reached, if the psychological support of the 1.3000 mark gets passed.
The Federal Reserve releases US FOMC Meeting Minutes where fed officials provide in-depth insights into the economic and financial conditions that influenced their vote on where to set interest rates.
"In light of global economic and financial developments and muted inflation pressures, the Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes," the statement said.
"In light of global economic and financial developments and muted inflation pressures, the Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes," the statement said.
Bank of England on Thursday
The major event of the week will be the Bank of England rate announcement on Thursday. The rate announcement and the results of the central bank's monetary policy vote will be published at 12:00 GMT.Another notable event during this week will be the Canadian Employment data release on Friday at 13:30 GMT.
Both of these events are scheduled to be covered by Dukascopy Analytics on our Dukascopy Webinars YouTube channel. The streams start ten minutes before the data release.
For more detailed info and a chance to ask questions watch the weekly calendar analysis by clicking on the link below.
GBP/USD short term review
During Monday's trading session, the currency exchange rate was resisted by the 55-hour simple moving average to push the rate to trade downside. On Tuesday morning, the British Pound was located at the 1.3041 mark.It is expected that the rate will keep moving downwards to pass the support level of the weekly S1 at 1.3014 to end the trading session at the 1.2980 level.
However, the weekly S1 at 1.3014 could support the British Pound to appreciate against the US Dollar to push the rate to trade sideways during the day.
Note, the chart was fully reviewed to make some changes to the patterns!
Hourly Chart
The 200-day simple moving average has failed to provide the needed support to the GBP/USD after holding for seven consecutive trading sessions.
Besides it there are no other close by support levels. The 100-day SMA is located at 1.2900, and the 55-day SMA was located at the 1.2800 mark.
In general, it can be deducted from this that there are no obstacles for a move lower also on the daily chart.
Daily chart
Most likely a part of the short positions were closed by short term traders in two scenarios.
During the sudden surge close by stop losses were triggered, or small scale short got their take profits triggered, as the pair reached the weekly S1.
Meanwhile, trader set up pending orders in the 100-base point range had become almost neutral. 52% of trader orders for the GBP/USD were set to sell.
In general, the sudden fundamental bounce upwards messed up trader set ups that were short term oriented or with a small risk margin.