On Wednesday morning, the GBP/USD confirmed that it would trade in the borders of the recently discovered channel up pattern. It did so by respecting the lower trend line of the pattern and recovering from it. In theory, the pair should now continue to surge in the pattern's borders until it would reach the upper trend line of the channel.
In the meantime, note that the currency exchange rate passed the support of the hourly simple moving averages, the weekly simple pivot point and the support zone of 1.3800/1.3820. It appeared that these levels were eventually passed despite holding for a short time.
Economic Calendar
On Wednesday, at 19:00 GMT, the US Federal Open Markets Committee is set to publish its Meeting Minutes. The GBP/USD had the initial reaction of 5.1 to 20.0 base points.
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 the day's trading hours, the rate had reached above the 1.3820 level and was finding resistance in the 100-hour simple moving average near 1.3840.If the rate manages to pass the resistance of the 100-hour SMA, the 55-hour SMA at 1.3857 could provide resistance. If both SMAs fail, the rate could reach for the upper trend line of the pattern.
On the other hand, support to the rate was being provided by the 1.3820/1.3800 zone, the 200-hour SMA near 1.3805 and the weekly simple pivot point at 1.3798. If these levels are passed, the pair would look for support in the channel up pattern's lower trend line.
Hourly Chart
On the daily candle chart, the rate has passed the resistance of the 55-day simple moving average, which kept the rate down since March 24.
The next target for the recovery could be the 1.4000 mark, which provided resistance throughout most of March.
Daily chart
Read More: Technical Analysis
Short sentiment declines
On Tuesday, traders were short, as 57% of trader open position volume on the Swiss Foreign Exchange was in short positions.
By the middle of Wednesday's trading, 54% of volume was short. Most likely, a part of short term traders had taken profits during the recent decline.
Meanwhile, in the 100-pip range around the rate the pending orders were 48% to sell and 52% to buy the GBP/USD pair. Namely, orders were still neutral.
On Tuesday, traders were short, as 57% of trader open position volume on the Swiss Foreign Exchange was in short positions.
By the middle of Wednesday's trading, 54% of volume was short. Most likely, a part of short term traders had taken profits during the recent decline.
Meanwhile, in the 100-pip range around the rate the pending orders were 48% to sell and 52% to buy the GBP/USD pair. Namely, orders were still neutral.