On Monday, the GBP/USD dropped to the support of the weekly S1 simple pivot point at 1.3145. Near term forecasts were based upon what would happen at this level.
In the meantime, the pair has broken a long term channel pattern.
Economic Calendar
There are only couple events expected that could affect the GBP/USD rate.
On Thursday, at 12:30 GMT a group of minor US data sets is scheduled to be published. The set will consist of US Producers Price Index, Core Price Index and Unemployment claims. In most cases these data releases cause insignificant moves.
The week will end with the publication of the US Consumer Price Index and Core Consumer Price Index changes. This event had been insignificant and did not cause increases of volatility since April. However, in August, there were notable moves on all USD pairs.
Click on the link below to see the historical reaction tables.
GBP/USD short-term review
In the near term future, the pair is expected to trade sideways above the weekly S1 simple pivot point at 1.3145. Afterwards, the rate should be approached by the resistance of the 55-hour simple moving average.If the SMA manages to push the rate down, it would reach for the monthly S1 simple pivot point at 1.3103.
On the other hand, if the 55-hour SMA fails, the rate could retrace back up to the monthly PP at 1.3250.
Hourly Chart
On the daily candle chart, the pair has broken the channel up pattern, which guided the rate since the start of July. That could have occurred due to the pair being overbought, as the daily simple moving averages are located below the 1.2900 level.
In theory, the rate should retrace back down to the SMAs levels.
Daily chart
Read More: Technical Analysis
Traders remain short
Since Friday, 69% of trader open position volume on the Swiss Foreign Exchange was in short positions.
Meanwhile, in the 100-pip range around the rate the pending orders were 71% to buy the GBP/USD pair.
Previously, the orders were 70% to sell.
Since Friday, 69% of trader open position volume on the Swiss Foreign Exchange was in short positions.
Meanwhile, in the 100-pip range around the rate the pending orders were 71% to buy the GBP/USD pair.
Previously, the orders were 70% to sell.