The Core PCE Price Index is the main measure that the US Federal Reserve has admitted to be using to in determining its policy. The inflation index revealed that price had increased on a month-on-month basis by 0.2%. However, the market consensus was that inflation had increased by 0.3%. The surprise caused the drop of the USD, as lower inflation signals that the Fed does not need to continue its strict monetary tightening policy. Economic Calendar
The week is set to end with the release of the United States employment data at 13:30 GMT. The data release consists of the US Average Hourly Earnings changes, Non-Farm Employment Change and Unemployment Rate. br>
Next week, on Monday at 15:00, the US ISM Services Purchasing Managers Index might impact the US Dollar's value.
On Friday, the US Producers Price Index and Core Producers Price Index are set to reveal inflation changes in the United States at the production level. In general, it is assumed that producer level inflation is followed afterwards by consumer level inflation, which the US policymakers want to reduce.
GBP/USD short-term view
A continuation of the ongoing surge is expected to be slowed down by 1.2300 and 1.2350, before the weekly R2 simple pivot point at 1.2381 would be reached.On the other hand, a decline is set to look for support in the 1.2250 level, the weekly R1 simple pivot point at 1.2234 and the recent low level zone at 1.2225/1.2230. Further below, take into account the 1.2200 and 1.2150 levels. In addition, the 50-hour simple moving average coulda act as support near 1.2150.
Hourly Chart
GBP/USD daily chart's review
On the daily candle chart, the pair has reached the summer high level zone at 1.2275/1.2330. As expected it is acting as resistance.Above the summer high level zone, take into account the April and May resistance at 1.2610/1.2660.
Daily chart
Read More: Technical Analysis
Traders increase short positions
On Thursday, traders were bearish, as 66% of trader open position volume on the Swiss Foreign Exchange was in short positions.
In the meantime, pending orders in a 100-base point range around the pair were 52% to sell the GBP/USD.
On Friday, traders were 70% short and pending orders were 55% to buy.
On Thursday, traders were bearish, as 66% of trader open position volume on the Swiss Foreign Exchange was in short positions.
In the meantime, pending orders in a 100-base point range around the pair were 52% to sell the GBP/USD.
On Friday, traders were 70% short and pending orders were 55% to buy.