The support of the 1.3900 level eventually failed to keep the GBP/USD up on Friday. After the support failed, the rate began a decline, which found support in the 1.3820 level.
A new support zone of this level and the March 16 low level has been drawn. In addition, a channel down pattern has been spotted. The pattern captures the rate's most recent decline from the 1.4000 mark.
Economic Calendar
On Wednesday, at 07:00 GMT the UK Consumer Price Index is scheduled to be published. The release has caused moves from 9.7 to 16.1 pips since October.
At 09:30 GMT the UK Manufacturing PMI and Services PMI are set to be published. These two data sets have caused moves from 13.0 to 26.7 pips since October 23.
On the same day, at 13:45 GMT the US Services and Manufacturing PMIs could cause moves from 7.8 to 30.5 pips.
On Thursday, the US Final GDP is set to be released at 12:30 GMT. The event has caused moves from 10.9 to 39.4 pips since December 2019.
The week is set to end with the UK Retail Sales at 07:00 GMT. The event has caused moves from 8.6 to 20.6 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
In regards to the near term future, the rate's recovery was expected to find resistance in the upper trend line of the channel down pattern. If the trend line fails to provide resistance, the rate should test the combined resistance of the 55, 100 and 200-hour simple moving averages and the weekly simple pivot point near the 1.3900 mark.If any of the mentioned resistance levels hold and cause a decline, the pair should look for support in the zone near 1.3820 and afterwards the weekly S1 simple pivot point at 1.3787.
Hourly Chart
On the daily candle chart, the rate appears to be trading sideways between the 1.3800 and 1.4000 levels.
Meanwhile, the 55-day SMA had almost caught up with the rate. Previously, the SMA was capable of pushing the GBP/USD up by just approaching it by approximately 50 base points. This week, the SMA was supporting the 1.3800 mark.
Daily chart
Read More: Technical Analysis
Short sentiment declines
Since Wednesday, 56% of trader open position volume on the Swiss Foreign Exchange was in short positions.
The situation changed on Monday, as 54% of volume was short.
Meanwhile, in the 100-pip range around the rate the pending orders were 56% to buy the GBP/USD pair.
Since Wednesday, 56% of trader open position volume on the Swiss Foreign Exchange was in short positions.
The situation changed on Monday, as 54% of volume was short.
Meanwhile, in the 100-pip range around the rate the pending orders were 56% to buy the GBP/USD pair.