This week, the top event for all markets will be the US Consumer Price Index and Core Consumer Price Index release on Wednesday at 12:30 GMT.
If the inflation data beats expectations, it is set to signal that the US Federal Reserve is pressured to hike interest rates and with it push the US Dollar's value up. On the other hand, a reveal that the inflation has slowed down might allow the central bank to go easier on the monetary tightening, which in turn would cause a decline of the USD.
On Thursday, at 12:30 GMT, the Producers Price Index and Core Producers Price Index will reveal inflation at the producer level. The PPI signals upcoming price increases or decreases at the consumer level.
On Friday, the Pound will impact this rate due to an adjustment of value. Namely, the UK GDP data is scheduled to be published at 06:00 GMT. The markets expect a decline of the GDP.
An economic contraction larger than expected might cause a decline of the GBP. On the other hand, better than forecast data is set to cause a recovery of the Pound.
GBP/USD short-term view
A move of the pair upwards might encounter resistance first in the combination of the 1.2150 level and the 200-hour simple moving average. Higher above, note the 1.2200 mark, the weekly R1 simple pivot point at 1.2239 and the 1.2250 mark. Above all these levels, the July high levels are located at 1.2275/1.2295.On the other hand, a decline of the Pound against the USD could look for support in the 1.2050 and 1.2000 levels, as it did in the aftermath of the August 5 US monthly employment data publication. Further below, the weekly S1 simple pivot point at 1.1949 and the 1.1950 are capable of acting as support and resistance.
Hourly Chart
GBP/USD daily chart's review
On the daily candle chart, the rate appears to be trading between two zones since mid-June. The pair is respecting resistance in the 1.2270/1.2330 zone. The resistance zone was recently reached by the 100-day simple moving average.Meanwhile, support was found in July in the 1.1760/1.1805 zone, which marks the 2022 low levels.
Daily chart
Read More: Technical Analysis
Traders are neutral
On Monday, traders were neutral, 51% of trader open position volume on the Swiss Foreign Exchange was in long positions.
In the meantime, pending orders in a 100-base point range around the pair were 62% to sell the GBP/USD.
Prior to the fundamental events, 51% of positions were short and pending orders were 54% to sell.
On Monday, traders were neutral, 51% of trader open position volume on the Swiss Foreign Exchange was in long positions.
In the meantime, pending orders in a 100-base point range around the pair were 62% to sell the GBP/USD.
Prior to the fundamental events, 51% of positions were short and pending orders were 54% to sell.