The GBP/USD has broken the resistance of the 200-hour simple moving average. Due to that reason it has no technical resistance as high as the 1.2735 level.
At that level the rate would meet the first resistance of the simple weekly pivot points.
Last Thursday, the Bureau of Economic Analysis released the US Prelim GDP data, which came out in line with expectations of 3.1%.
According to the official release: "Today's estimate reflects downward revisions to non-residential fixed investment and private inventory investment and upward revisions to exports and personal consumption expenditures (PCE). Imports, which are a subtraction in the calculation of GDP, were revised up; the general picture of economic growth remains the same."
No significant UK data during the week
On Wednesday, a minor move might be caused by the ISM Non-Manufacturing PMI at 14:00 GMT.
On Thursday, all attention will be on the European Central Bank. At 11:45 GMT the Monetary Policy Statement will be published. On the release the EUR/USD has moved from 10 to 35 pips.
The event will be followed by the ECB press conference at 12:30 GMT. During the questions and answers session at the end of it the EUR is bound to make sharp moves.
At the same time the Canadian Trade Balance will be published. This event has caused moves from ten to sixty pips.
The week will end with the Canadian and US employment data being published at 12:30 GMT. This event consists of five different data sets being released.
For more details watch the Economic Calendar Overview. Moreover, feel free to ask questions for details.
GBP/USD short-term review
The GBP/USD has surged above the technical resistance cluster, which was located near 1.2650. Namely, a pivot point and the 200-hour simple moving average were broken.Moreover, the rate declined on Tuesday morning and confirmed the technical levels as support levels.
By the middle of the day a surge began, which was expected to reach the R1 pivot point at 1.2735. Although, note that the move will most likely occur gradually not in a sharp surge up.
On the other hand, note that the 1.2700 level will provide psychological resistance to the pair and slow down the surge of the rate.
Hourly Chart
On the daily candle chart, there were signals showing that the pair is oversold. Namely, all of the daily simple moving averages were located above the 1.2950 level.
Daily chart
By the middle of Tuesday's trading session 74% of open GBP/USD open position volume was in long positions.
As the rate pushed through the resistance of the 200-hour SMA, traders reopened previously closed long positions. That is assumed because the sentiment had dropped down to 70% long on Monday.
Meanwhile, trader set up pending orders in the 100-pip range were still neutral, as 51% of orders were set to sell. They had not changed since Monday.