The GBP/USD broke the channel down pattern and reached the 1.3700 level. By the middle of Wednesday's GMT trading hours, the rate had bounced off this level's resistance.
In theory, the currency pair was expected to reach for the support of the weekly simple pivot point and the 200-hour simple moving average at the 1.3600 level.
Economic Calendar
During the week there will be minor data sets published, which could cause initial reactions of up to 20 pips. Traders with close by tight stop losses should take into account the times of the macroeconomic data releases.
On Wednesday, the United States Bureau of Labor Statistics is set to publish the Consumer Price Index and Core Price Index at 13:30 GMT.
Afterwards, at 13:30 GMT, expect the weekly US Unemployment Claims. Despite the attention this release gets, we do not recommend monitoring it closely, as the last two releases caused moves below ten base points on the GBP/USD.
The week will end with the publication of the US Retail Sales and US Core Retail Sales at 13:30 GMT. In November and December, these data sets caused an increase of volatility above the average.
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 the near term future, the rate was expected to decline to the support of the 1.3600 level. This level was strengthened by the weekly simple pivot point at 1.3605 and the 200-hour simple moving average at 1.3598. In the meantime, this level was being approached by the 55 and 100-hour simple moving averages.In the case of the support levels failing, the rate could first reach for the 1.3550 mark and afterwards the weekly S1 simple pivot point at 1.3505.
On the other hand, if the support levels hold and a surge starts, the pair would test the resistance of the weekly R1 at 1.3676 and the 1.3700 mark.
Hourly Chart
On the daily candle chart, it can be observed that previously the 1.3700 level strengthened the resistance of the large scale channel up pattern.
In regards to the future, due to the angle of the resistance of the pattern, the rate still has room for a surge. However, a decline to the 55- day SMA is likely, as the rate had done so each time after reaching the upper trend line.
Daily chart
Read More: Technical Analysis
Sentiment changes
Since Friday, 63% of trader open position volume on the Swiss Foreign Exchange was in short positions.
On Wednesday, the sentiment became 69% short.
Meanwhile, in the 100-pip range around the rate the pending orders were 70% to sell the GBP/USD pair.
Since Friday, 63% of trader open position volume on the Swiss Foreign Exchange was in short positions.
On Wednesday, the sentiment became 69% short.
Meanwhile, in the 100-pip range around the rate the pending orders were 70% to sell the GBP/USD pair.
Previously, the orders were 85% to sell. Not all orders were executed during the increase of short sentiment.