The GBP/USD currency exchange rate started the year just below the resistance of the 1.3700 level. This level was reached as a result of the surge, which started as the rate broke a resistance zone near 1.3625 on Thursday.
In regards to the future, the rate was testing the 1.3700 level. Future scenarios were based upon whether or not the round exchange rate level holds.
Economic Calendar
The first week of the year is bound to have notable data releases. The top among them are the release of the US Federal Open Markets Committee Meeting Minutes and the US monthly employment data sets.
On Tuesday, at 15:00 GMT, a minor move could be caused by the release of the US ISM Manufacturing PMI. The GBP/USD has moved 11.1 to 29.5 pips on the announcement since August.
On Wednesday, the mentioned FOMC Meeting Minutes are set to be released at 19:00 GMT. Expect a minor move from 7.2 to 10.1 pips. Note that there was an anomaly of 20.0 pips in August.
On Thursday, at 13:30 GMT, the US Unemployment Claims could cause a minor move on USD pairs and assets. In addition, on the same day, at 15:00 GMT the US ISM Non-Manufacturing PMI results will be published.
The releases have caused moves, respectively, from 9.3 to 16.0 and 13.3 to 21.1 base points.
The week will end with the release of three US employment data sets. The releases will occur on Friday at 13:30 GMT. This event has caused moves from 18.5 to 32.4 pips since August.
Click on the link below to find out more about the data releases of this and other currency exchange rates.
GBP/USD short-term review
The GBP/USD exchange rate has revealed a rising wedge pattern.From a theoretical perspective, it is likely that the currency pair could breach the given pattern south in the nearest future. The pair could target the support provided by the weekly S1 and the 200-hour SMA near 1.3500.
Meanwhile, note that the exchange rate could gain support from the 55-hour SMA and the weekly PP in the 1.3600/1.3635 range. Thus, some upside potential could prevail in the market, and the rate could try to exceed the weekly R1 at 1.3765.
Hourly Chart
On the daily candle chart, the pair has broken the resistance of the December high levels and reached the upper trend line of a large scale channel up pattern. The pattern has guided the rate since the start of September.
In theory, the currency pair should bounce off the resistance of the pattern. However, due to the angle of the resistance line, the pair would still have move for a surge.
In the meantime, the broken December high level could start to provide support to the GBP/USD pair.
Daily chart
Read More: Technical Analysis
Short sentiment decreases
Since Tuesday, nearly 70% of trader open position volume on the Swiss Foreign Exchange was in short positions.
On Monday, the sentiment had dropped, as 64% of volume was in short positions.
Meanwhile, in the 100-pip range around the rate the pending orders were 57% to buy the GBP/USD pair.
Since Tuesday, nearly 70% of trader open position volume on the Swiss Foreign Exchange was in short positions.
On Monday, the sentiment had dropped, as 64% of volume was in short positions.
Meanwhile, in the 100-pip range around the rate the pending orders were 57% to buy the GBP/USD pair.