During Thursday morning hours, the GBP/USD exchange rate has been testing the upper line of the rising wedge pattern.
From a theoretical point of view, some downside potential could prevail.
Economic Calendar
On Thursday, at 13:30 GMT, a minor move could be caused by the weekly US Unemployment Claims. This event has caused GBP/USD moves from 8.8 to 45.7 pips since December 17.
However, note that the 45.7 pip move in December 23 was an anomaly caused by other events not the Unemployment Claims. Without the 45.7 pips move, the range is 8.8 to 12.7 pips.
On Friday morning, at 07:00 GMT the UK Retail Sales could cause a move from 6.4 to 16.0 base points.
On the same day at 09:30 GMT, the UK Manufacturing and Services PMIs could cause a move from 13.0 to 18.7 pips.
The Friday will end with the US Manufacturing and Services PMIs at 14:45 GMT. The GBP/USD has moved from 7.8 to 35.5 pips on the release.
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
During today's morning, the GBP/USD exchange rate has been testing the upper line of the rising wedge pattern.From a theoretical point of view, it is likely that the currency pair could bounce off and trade downwards within the predetermined pattern. Note that the pair could gain support from the 55-, 100– and 200-hour SMAs, as well the weekly PP in the 1.3584/1.3650 range.
However, if the given pattern does not hold, the British Pound could continue to extend gains against the US Dollar in the short term. Note that the nearest resistance level—the weekly R2, is located at 1.3844.
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
Traders go short
On Thursday, 68% of trader open position volume on the Swiss Foreign Exchange was in short positions.
On Wednesday, the sentiment was 69% short.
Meanwhile, in the 100-pip range around the rate the pending orders were 74% to sell the GBP/USD pair.
On Thursday, 68% of trader open position volume on the Swiss Foreign Exchange was in short positions.
On Wednesday, the sentiment was 69% short.
Meanwhile, in the 100-pip range around the rate the pending orders were 74% to sell the GBP/USD pair.