Yesterday, the GBP/USD exchange rate dropped below 1.2300.
During Tuesday morning, the rate was testing the support level – the monthly S3 at 1.2178.
Economic Calendar
Today, the US Retail Sales could cause a small move in the markets at 14:30 GMT.
On Wednesday, the event of the week is set to occur, as at 20:00 GMT the FOMC Statement and Federal Funds Rate are going to be published.
Meanwhile, Dukascopy Analytics are not publishing the historical reactions this week, as the market environment has changed to such a degree that the historical data is unlikely to be relevant.
GBP/USD short-term review
Yesterday, the GBP/USD exchange rate declined below the 1.2300 level. During Tuesday morning, the rate declined to the support level formed by the monthly S3 at 1.2178.Note that the currency pair is pressured by the 55-hour SMA near 1.2346. Thus, some downside potential could prevail in the nearest future. In this case the pair could re-test the 2017/2020 low at 1.1977.
However, if the given support level holds, it is likely that the British Pound could consolidate against the US Dollar in the short run. Also, it is unlikely that bears could prevail, and the rate could exceed the monthly S2 at 1.2452.
Hourly Chart
On the daily candle chart, the drop of the pair can be observed better. One can see that the cluster of support levels near the 1.2600 level did not hold. In addition, the channel down pattern was broken.
Daily chart
Read More: Technical Analysis
Traders remain neutral
Since Friday, 53% of open GBP/USD position volume on the Swiss Foreign Exchange has been in long positions.
The sentiment has been almost neutral for more than a week.
The sentiment has been almost neutral for more than a week.