Prior to the event, the GBP/USD retraced back up above 1.2900 and broke resistance levels. It could be assumed that the short position holders were taking profits prior to the event. Economic Calendar
This week, all attention will be on the expected US Federal Reserve Rate hike at 18:00 GMT on Wednesday. The Federal Reserve is expected to increase base interest rate by 0.25%.
On Thursday, the European Central Bank is set to increase its Main Refinancing Rate from 4.00% up to 4.25% at 12:15 GMT.
After the European hike, at 12:30 GMT the US Advance GDP, Unemployment Claims and the Durable Goods Orders are highly likely set to impact the financial markets via an adjustment of US Dollar's value.
On Friday, at 12:30 GMT, the US Core PCE Price Index data is set to impact the US Dollar.
GBP/USD short-term view
Resistance might be found in the weekly simple pivot point at 1.2931, the 200-hour SMA and the 1.2950 mark, before the 1.3000 mark would be reached.On the other hand, a decline of the Pound against the US Dollar could find support in the combination of the 50 and 100-hour simple moving averages near the 1.2840/1.2850 range.
However, fundamentals and, especially, Fed rate hike are above all technicals.
Hourly Chart
GBP/USD daily chart's review
On the daily candle chart, most recently the 1.2800 mark served as support, it could be that the 1.2800/1.2850 range is capable to act as support and resistance. In the case of a broader surge, the pair could aim at the July high at 1.3150.Meanwhile, note the approaching 50 and 100-day simple moving averages. The 50-day SMA has been ignored during May and June. However, the 100-day SMA's support caused the most recent broader surge.
Daily chart
Read More: Technical Analysis
Traders are bearish
Before the FOMC, open GBP/USD positions by Swiss Foreign Exchange traders were 66% short.
Meanwhile, trader pending orders in the 100 pip range around the rate were 62% to buy.
Before the FOMC, open GBP/USD positions by Swiss Foreign Exchange traders were 66% short.
Meanwhile, trader pending orders in the 100 pip range around the rate were 62% to buy.