GBP/USD has been making attempts to pass the resistance of an upper trend line of a channel down pattern and a pivot point near 1.2740.
By the middle of Friday's trading session a third attempt was in progress. Watch the trend line and the pivot point for signals of the future of the pair's direction.
Institute for Supply Management released the US ISM Non-Manufacturing PMI data, which came out better-than-expected of 56.9 compared with forecast of 55.6.
According to the official release: "he NMI registered 56.9 percent, which is 1.4 percentage points higher than the April reading of 55.5 percent. This represents continued growth in the non-manufacturing sector, at a slightly faster rate."
No significant UK data during the week
The week will end with the Canadian and US employment data being published at 12:30 GMT. This event consists of five different data sets being released.
GBP/USD short-term review
On Friday morning, the GBP/USD was heading for the third time to the resistance of the pivot point and an upper trend line of a channel down pattern that both were located close to the 1.2740 level.If the rate manages to break the technical resistance at 1.2740, the 1.2790 level should be targeted next. At that level a monthly pivot point is located at.
In a second scenario the rate could again bounce off the 1.2740 level. In that case it would most likely retreat to the 55-hour SMA, which on Friday was located at the 1.2700 level.
Hourly Chart
On the daily candle chart, there were signals showing that the pair is oversold. Namely, all of the daily simple moving averages were located above the 1.2950 level.
In addition, a new descending channel pattern was added to the chart. It could be seen that the recent surge was consistent with the pattern, as the rate bounced off the channel's lower trend line.
Daily chart
Since the middle of Wednesday's trading session 72% of open GBP/USD open position volume was in long positions.
The sentiment changed on Friday. By the middle of the day 69% of open position volume was in long positions.
The sideways trading and upcoming weekend had convinced some to close their long positions.
Meanwhile, trader set up pending orders in the 100-pip range were neutral, as 52% of orders were set to buy. Previously, 57% of orders were set to buy.
A part of the orders appears to have been executed.