During Tuesday morning GMT trading hours, the GBP/USD currency exchange rate passed the support of the weekly S1 simple pivot point that kept the pair up on Monday.
In the near term future, the pair was expected to reach for the S1 monthly pivot point at 1.3103.
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
On Tuesday morning, the pair was expected to reach for the monthly S1 simple pivot point at 1.3103. Afterwards, the rate had two likely scenarios.Due to the recent sharp decline the rate has become oversold, as indicated by the fact that the hourly simple moving averages have been left above the 1.3200 level. As the SMAs approach the rate step by step, the pair could trade sideways above the monthly pivot point.
In the meantime, the decline of the rate could continue. Namely, if the support of the monthly pivot point fails, the GBP/USD would have no support as low as the weekly S2 pivot point at 1.3007.
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.
Daily chart
Read More: Technical Analysis
Short sentiment decreases
Since Friday, 69% of trader open position volume on the Swiss Foreign Exchange was in short positions.
On Monday, the situation changed, as 66% of volume was short.
Meanwhile, in the 100-pip range around the rate the pending orders were 68% to buy the GBP/USD pair.
Previously, the orders were 71% to buy.
Since Friday, 69% of trader open position volume on the Swiss Foreign Exchange was in short positions.
On Monday, the situation changed, as 66% of volume was short.
Meanwhile, in the 100-pip range around the rate the pending orders were 68% to buy the GBP/USD pair.
Previously, the orders were 71% to buy.