The GBP/USD trades between the support line of the medium scale channel down pattern and the resistance of hourly SMAs and a weekly simple pivot point.
In theory, the rate should eventually pass the resistance levels and surge.
Economic Calendar
As the last week of the month, the following week is expected to be a quiet one. However, there are events that should be watched in the case a sharp move occurs.
On Wednesday, at 12:30 GMT traders should watch the release of the US Durable Goods Orders data. The event is capable of causing volatility increases above average level.
On Thursday, the US Preliminary GDP and the US Unemployment claims are set to be published. Due to these events usually not being released at the same time, the past reactions need to be combined. Namely, in the case of the same direction surprise the volatility pips need to be added one to another. On the other hand, different results shown by each data set could cancel one another out.
Click on the link below to find out more about the data releases.
GBP/USD short-term review
On Tuesday morning, the GBP/USD approached the resistance of the 55-hour SMA at 1.3110. The SMA was the first one in a resistance cluster that was located from 1.3110 to 1.3140. The cluster was made up of 55, 100 and 200-hour SMAs and the weekly simple pivot point.In the meantime, the rate finds support in the lower trend line of a channel down pattern. In addition, it was spotted that the rate's two previous surges started at the 1.3060 level, which could be providing support on its own.
In theory, the rate should eventually pass the resistance cluster and surge. In the case of such surge the pair would have no obstacles as high as the weekly R1 simple pivot point at 1.3220.
On the other hand, if the SMAs manage to push the rate through the support of the channel down pattern, the weekly S1 pivot point at 1.3012 would be the next target.
Hourly Chart
On the daily candle chart, the pair is trading in a channel up pattern, which has guided the rate since the end of June
In the meantime, the rate is in the overbought zone, as it is trading far above the 55-, 100- and 200-day moving averages. This signals that the rate needs to trade sideways or retrace back down.
Daily chart
Read More: Technical Analysis
Traders remain short
Since Friday, 70% of trader open position volume on the Swiss Foreign Exchange was in short positions.
The sentiment was 69% short on Tuesday.
Meanwhile, in the 100-pip range around the rate the pending orders were 53% to buy the GBP/USD pair.
Previously, 56% of orders were to buy.
The sentiment was 69% short on Tuesday.
Meanwhile, in the 100-pip range around the rate the pending orders were 53% to buy the GBP/USD pair.
Previously, 56% of orders were to buy.