As forecast on Tuesday, the GBP/USD plummeted. However, the rate reached a lot lower than it was expected. It was forecast that the pair could reach the 1.2350 level, but instead the decline stopped at 1.2250.
On Wednesday, the currency exchange rate recovered, as it approached various technical resistance levels that were located above 1.2350.
Economic Calendar
Next UK data release is set to be out at 06:00 GMT on Thursday. The UK Retail Sales could cause a move of 20 pips.
On the same day, at 12:30 GMT, the US Unemployment Claims are scheduled to be released. Most likely, the event would reveal another major decline in US employment.
Also on Thursday, at 13:45 US Manufacturing PMI could cause a move, as in February and March it created 24.1 and 29.9 pip moves.
Last but not least, a notable reaction of above then pips could be created by the US Durable Goods orders.
GBP/USD short-term review
Note that the currency pair is pressured by the 55-, 100– and 200-hour SMAs in the 1.2370/1.2475 area. In addition, the weekly S1 simple pivot point was located at 1.2395. Moreover, a 50.00% Fibo was at 1.2418.If the resistance levels cause a decline, the pair should test the support of the monthly pivot point at 1.2345, the weekly S2 at 1.2281 and the 1.2250 mark.
Hourly Chart
On the daily candle chart, the pair has bounced off the resistance of the 55 and 200-day simple moving averages.
In regards to the future, the rate could decline to the 1.2200 level, which provided the rate with support at the start of April.
Daily chart
Read More: Technical Analysis
Traders take profits
On Tuesday, the sentiment on the Swiss Foreign Exchange was 56% short.
By the middle of Wednesday's GMT trading hours, the sentiment was 51% short. Traders had taken profits during the drop of the rate.
On Tuesday, the sentiment on the Swiss Foreign Exchange was 56% short.
By the middle of Wednesday's GMT trading hours, the sentiment was 51% short. Traders had taken profits during the drop of the rate.