On Wednesday, the recent low and high levels that were caused by EU and UK trade talks were used to set Fibonacci retracement levels. In the meantime, it was spotted that this week the rate has been trading in a wide channel up pattern.
In the near term future, the rate was expected to trade sideways, as it faced strong clusters of resistance and support. However, note that any announcement in regards to the trade talks would easily crash technical patterns and cause large swings up or down.
Economic Calendar
On Thursday, the US Durable Goods Orders and Core Durable Goods Orders data will be released. The rate has moved from 9.5 to 21.9 pips on the announcement since July 2020.
Click on the link below to find out more about the data releases of this and other currency exchange rates.
GBP/USD short-term review
In regards to the near term future, the rate is expected to trade sideways between the support of the 200-hour SMA and the 50.00% Fibo at 1.3415 and the resistance of the 100-hour SMA, the 61.80% Fibo and the weekly simple pivot point in the 1.3447/1.3477 range. The sideways trading should continue until the rate reaches the lower trend line of the channel up pattern.Afterwards, in theory, the rate should cause a surge in the border of the pattern by forcing the rate to break the resistance zone of 1.3447/1.3477. A following surge would have no technical resistance. Instead the round exchange rate levels of 1.3500, 1.3550 and 1.3600 levels could impact the rate, as it step by step reaches for the December 17 high level of 1.3625.
On the other hand, in the case of the pattern failing, the rate would pass the support of the 1.3415 level. It would then find support in the 55-hour SMA, the 38.20% Fibo and afterwards the weekly S1 and the 23.60% Fibo. Namely, the GBP/USD would bounce between these levels.
Hourly Chart
On the daily candle chart, the rate has bounced off the lower trend line of a channel up pattern, which was strengthened by the 55-day SMA and a 61.80% Fibonacci retracement level.
However, the following recovery was stopped by the resistance of the previously passed August high level at 1.3485.
Daily chart
Read More: Technical Analysis
Traders are short
On Tuesday, 70% of trader open position volume on the Swiss Foreign Exchange was in short positions.
On Wednesday, 66% of volume was short.
Meanwhile, in the 100-pip range around the rate the pending orders were 74% to sell the GBP/USD pair.
On Tuesday, 70% of trader open position volume on the Swiss Foreign Exchange was in short positions.
On Wednesday, 66% of volume was short.
Meanwhile, in the 100-pip range around the rate the pending orders were 74% to sell the GBP/USD pair.