In the meantime, note that the Tuesday's volatility was caused by the US CPI release, which showed mixed future outlook data. However, the volatility respected the 1.2590/1.2610 range and revealed the upper trend line of a channel down pattern. Economic Calendar
On Wednesday, the top event of them all will take place. The US Federal Reserve will announce its Federal Funds Rate. The central bank is expected to keep the rate at 5.50%. Moreover, note the follow up press conference of the Chairman of the Federal Reserve Jerome Powell. The events are scheduled for 19:00 and 19:30 GMT.
After the US reveal their policy, the rest of the world decides how to react on Thursday. Namely, the Swiss National Bank at 08:30 GMT, the Bank of England at 12:00 GMT and the European Central Bank at 13:15 GMT are all set to make rate announcements. The CHF, GBP and EUR are set to act to the rate announcements.
However, in most cases these banks do not surprise the financial markets. Moreover, they are all expected to follow the example of the Fed and keep their rates unchanged.
Meanwhile, note that the ECB President and Vice President are set to host a press conference at 13:45 GMT. Sometimes Christine Lagarde makes comments that impact the Euro and European stock indices.
On Friday, the markets could move if one of the Markit Institute Flash Services and Manufacturing PMI survey results reveal a surprise. Starting from 08:15 GMT up to 14:45 GMT the institute will release data for Eurozone countries, the United Kingdom and the United States.
GBP/USD short-term view
If the Fed and Jerome Powell speech push the rate down below 1.2500, potential support could be found in the weekly S1 at 1.2456 and the lower trend line of the channel down pattern. If the pattern would be broken, the 1.2400 mark could be the target of a GBP/USD drop.On the other hand, a potential fundamental surge is likely going to ignore the 1.2540 level, the 50 and 100-hour simple moving averages near 1.2560. Above these levels, the weekly simple pivot point at 1.2590, the 200-hour simple moving average, the upper trend line of the channel pattern and the 1.2590/1.2610 range could stop a surge. A failure of the resistance levels might result in a surge to the weekly R1 simple pivot point at 1.2678 and the 1.2700 mark.
Hourly Chart
GBP/USD daily chart's review
On the daily candle chart, a new resistance range is marked at 1.2700/1.2720. This range appears to have held and caused the most recent decline.It was reported last week that the decline could aim for the 200-day simple moving average near 1.2525. The SMA has been reached and is acting as support since Friday.
In regards to the future, watch the major support and resistance zone at 1.2300/1.2450 and the 50 and 100-day simple moving averages in it. Meanwhile, a move above 1.2700 could face the 1.2800/1.2850 range that acted as resistance during June and August.
Daily chart
Read More: Technical Analysis
Traders are neutral
Before the central bank events, traders were 51% short, but pending orders in the 100 pip range around the pair were 51% to sell.
Before the central bank events, traders were 51% short, but pending orders in the 100 pip range around the pair were 51% to sell.