During Tuesday, the GBP/USD exchange rate revealed a short-term descending channel.
From a theoretical perspective, it is likely that some downside potential could prevail in the market.
Economic Calendar
This week, there are a lot of events, which could impact the GBP/USD currency exchange rate.
On Wednesday morning, at 06:00 GMT the UK Consumer Price Index is bound to be released. Its impact has declined in the last months. However, prior to that it caused moves above 30 pips in just five minutes.
On Thursday, the future of the GBP is set to be revealed. The Bank of England will make a rate announcement at 11:00 GMT. Expect a move of around 50 pips just on the announcement.
Afterwards, take a look at the US Unemployment Claims at 12:30 GMT. A notable reaction is possible, as a surprise number could cause a notable move.
GBP/USD short-term review
Yesterday, the GBP/USD exchange rate revealed a short-term descending channel. During Wednesday morning, the rate was trading at 1.2550.From a theoretical point of view, it is likely that some downside potential could prevail in the market. Note that the nearest support, formed by the Fibo 50.00% and the weekly S1, is located at 1.2410.
Meanwhile, if the currency pair fails to decline below the psychological level at 1.2500, it is likely that the British Pound could consolidate against the US Dollar in the short run.
Hourly Chart
On the daily candle chart, on Tuesday, the rate had tested the resistance of the 200-day simple moving average, which was located at the 1.2687 level.
Note that the rate has also gained support from the 100-day simple moving average near 1.2530.
Daily chart
Read More: Technical Analysis
Swiss traders short GBP/USD
On Tuesday, 56% of trader open position volume on the Swiss Foreign Exchange was in short positions.
On Wednesday, the short sentiment increased to 58%.
Meanwhile, in the 100-pip range around the rate, 67% of pending orders were set to buy the GBP/USD.
On Wednesday, the short sentiment increased to 58%.
Meanwhile, in the 100-pip range around the rate, 67% of pending orders were set to buy the GBP/USD.