During the prior weeks, the GBP/USD traded in channel down and channel up patterns that represented the rate's larger scale sideways trading between the 1.3800 and 1.4000 mark.
Most recently, the rate was in a channel down pattern that had guided the rate to a support zone near 1.3820. The zone provided enough support for the pair to break the upper trend line of the channel pattern. However, as the 55-hour simple moving average approached from above, a decline started in the aftermath of the breaking of the pattern.
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
By the middle of Tuesday's European trading hours, the GBP/USD had dropped and passed the support of the 1.3800 level and found support in the March 12 low level at 1.3775.If the 1.3775 support would hold, the rate should find resistance in the weekly S1 simple pivot point at 1.3787. If the pivot point does not provide resistance, the pair could retrace back up to the 1.3820 level.
On the other hand, a decline below the 1.3775 level would most likely result in a decline to the 1.3700 mark, as there is no technical support as low as that level. At that level both the weekly S2 could provide support and the round exchange rate level should provide psychological support.
Hourly Chart
On the daily candle chart, the rate has ended trading between the 1.4000 and 1.3800 levels, which has been going on since February 26. In addition, the rate has passed the support of the 55-day simple moving average, which was strengthening the support of the 1.3800 level.
Next support on the chart was the lower trend line of the large scale channel up pattern that captures the rate's large scale recovery, which has occurred since the initial coronavirus drop in March 2020. On Tuesday, the support line was located at the 1.3700 mark.
In the meantime, the 1.3600 mark was being supported by the 100-day simple moving average.
Daily chart
Read More: Technical Analysis
Short sentiment declines
On Tuesday, 51% 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. During the previous week, 56% of volume was short.
On Tuesday, 51% 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. During the previous week, 56% of volume was short.
It appeared on Tuesday that short traders had taken profits.
Meanwhile, in the 100-pip range around the rate the pending orders were 75% to buy the GBP/USD pair.
Meanwhile, in the 100-pip range around the rate the pending orders were 75% to buy the GBP/USD pair.