The hourly simple moving averages failed to provide the GBP/USD with support that would force it to once again test the 1.3860 level. Instead, by the middle of Friday's trading hours, the rate had retreated to the 1.3780 mark.
In theory, due to not having any close by technical support, the rate should continue to decline as low as 1.3740.
Economic Calendar
Next week is expected to have a lot of data releases, which could impact the currency exchange rate from both the GBP and USD sides.
On Wednesday morning, at 07:00 GMT the GBP/USD could move from 9.7 to 16.1 pips due to the release of the United Kingdom Consumer Price Index.
On the same day, at 13:30 GMT, the US Retail Sales and Core Retail Sales could cause a move of 10.3 to 26.3 pips, as it has done since September. However, at the same time, the US Producer Price Index and Core Producer Price Index are set to be published. This event has caused moves from 11.1 to 36.2 pips.
If both data sets reveal a positive or negative surprise, compared to the market forecast, the impact could be combined. On the other hand, the data could contradict one another and cancel out the effect of an impact.
Also on Wednesday, at 19:00 GMT the FOMC Meeting Minutes PDF document will be released. Note that the impact of the meeting minutes occurs slowly not suddenly, as the market participants read and interpret the meeting minutes.
On Thursday, market participants are set to watch the weekly US Unemployment Claims at 13:30 GMT. The rate has moved from 7.6 to 14.9 pips on the announcement since January 14.
On Friday morning, the UK Retail Sales data will be out at 07:00 GMT. The GBP/USD has moved from 6.4 to 20.6 pips on the announcement.
Friday will be the day that the Markit Purchasing Managers Indices are published. These survey results reveal what various sector purchasing managers are thinking about the future outlook of their respective sectors. In general, the markets look at the results of the services and manufacturing sectors.
The UK Services and Manufacturing PMIs are set to be published at 09:30 GMT. This event has caused moves from 13.0 to 26.7 pips since September.
The week will end for the GBP/USD with the US PMIs at 14:45 GMT. The release could cause a move from 7.8 to 30.5 pips.
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
Since Thursday, the GBP/USD exchange rate has been trading downwards.Given that the currency pair is pressured by the 55– and 100-hour SMAs, as well the weekly R1 in the 1.3400/1.3825 range, it is likely that some downside potential could prevail in the market.
Meanwhile, note that the pair could gain support from the 200-hour moving average near 1.3735. If the predetermined support holds, the rate could consolidate. Otherwise, the pair could decline to weekly PP at 1.3688.
Hourly Chart
On the daily candle chart, the pair has broken the resistance of the previous 2021 high level and surged.
In regards to the future, the pair was expected to test the upper trend line of the channel up pattern, which has guided the rate since September.
Daily chart
Read More: Technical Analysis
Traders are mostly short
On Friday, 74% of trader open position volume on the Swiss Foreign Exchange was in short positions.
During the middle of Thursday's European trading hours, the sentiment was 72% short.
Meanwhile, in the 100-pip range around the rate the pending orders were 64% to sell the GBP/USD pair.
On Friday, 74% of trader open position volume on the Swiss Foreign Exchange was in short positions.
During the middle of Thursday's European trading hours, the sentiment was 72% short.
Meanwhile, in the 100-pip range around the rate the pending orders were 64% to sell the GBP/USD pair.