On the GBP/USD charts it resulted in a decline to levels near 1.2580, before a recovery occurred. This move and the price action before have confirmed the existence of support and resistance ranges at 1.2575/1.2585 and 1.2665/1.2685. Meanwhile, the notorious 1.2590/1.2610 range did not manage to impact the rate during the fundamental event.
On Monday, the price fluctuated between the resistance of the 50-hour simple moving average and the 1.2640 level and support levels at 1.2615/1.2620. Economic Calendar
This week, US inflation data sets are in focus.
The United States Consumer Price Index will be released to the public on Wednesday at 12:30 GMT. The markets expect US inflation to show an average price increase of 0.3% in core and base levels. This would mean annual inflation of 3.4%, which is an increase, compared to March's 3.2%.
Higher inflation indicates that the Federal Reserve cannot cut interest rates and tightening of USD supply is needed. Namely, high inflation equals higher US Dollar value. Lower inflation is set to create the opposite – a decline of the USD.
On Thursday, at 12:30 GMT, additional US inflation data will be released. The less noteworthy Producer Price Index will be published.
The PPI shows price changes at the producer level. Base theory is that all price increases at the production level are sooner or later passed down to the consumer, as the producers want to stick to their profit margins. Namely, the PPI is a pre-signal to what will happen with the CPI.
GBP/USD hourly chart analysis
A surge above 1.2640 could result in a test of the resistance of the 1.2665/1.2685 range. Higher above, take into account the 1.2700 mark and the weekly R1 simple pivot point.In the case of a GBP decline against the USD below the weekly simple pivot point and the 100 and 200-hour simple moving average, the rate could still find support in the 1.2600 mark. Further below, the 1.2575/1.2585 range is expected to act as support.
Hourly Chart
GBP/USD daily candle chart analysis
On the daily candle chart, the rate is finding support in the 200-day simple moving average at 1.2540. However, it could be that the 1.2500/1.2535 range is the real source of the support.Last week, the combination of the 50 and 100-day simple moving averages were acting as resistance near 1.2670.
Daily chart
Read More: Technical Analysis
Traders go long
On Monday, traders were 54% bullish, as that proportion of all open position volume on Swiss Foreign Exchange was in long positions.
Meanwhile, pending orders in the 100-pip range around the rate were 59% to buy.
On Thursday, traders were 52% short and orders were 54% to sell.
Meanwhile, pending orders in the 100-pip range around the rate were 59% to buy.
On Thursday, traders were 52% short and orders were 54% to sell.