This week, the top event for all markets will be the US Consumer Price Index and Core Consumer Price Index release on Wednesday at 12:30 GMT.
If the inflation data beats expectations, it is set to signal that the US Federal Reserve is pressured to hike interest rates and with it push the US Dollar's value up. On the other hand, a reveal that the inflation has slowed down might allow the central bank to go easier on the monetary tightening, which in turn would cause a decline of the USD.
On Thursday, at 12:30 GMT, the Producers Price Index and Core Producers Price Index will reveal inflation at the producer level. The PPI signals upcoming price increases or decreases at the consumer level.
On Friday, the Pound will impact this rate due to an adjustment of value. Namely, the UK GDP data is scheduled to be published at 06:00 GMT. The markets expect a decline of the GDP.
An economic contraction larger than expected might cause a decline of the GBP. On the other hand, better than forecast data is set to cause a recovery of the Pound.
GBP/USD short-term view
An extension of the decline of the Pound against the US Dollar might look for support in the 1.2050 mark, which acted as support during the early hours of this week's trading. Further below, note the 1.2000 mark.However, a surge of the currency rate would have to pass the 100-hour simple moving average, prior to approaching the 1.2150 mark and the 200-hour simple moving average. Higher above, note the resistance zone at 1.2195/1.2215.
Hourly Chart
GBP/USD daily chart's review
On the daily candle chart, the rate has been breaking one resistance after another. Namely, the upper trend line of the first half of 2022 channel down pattern was broken. On Monday, August 1, the 50-day simple moving average was breached.In regards to the near term future, take into account that the 100-day simple moving average near 1.2340.
Daily chart
Read More: Technical Analysis
Traders have set up sell orders
On Monday, traders were neutral, 51% of trader open position volume on the Swiss Foreign Exchange was in long positions.
In the meantime, pending orders in a 100-base point range around the pair were 62% to sell the GBP/USD.
On Friday, 50% of positions were short and long and pending orders were 60% to sell.
On Monday, traders were neutral, 51% of trader open position volume on the Swiss Foreign Exchange was in long positions.
In the meantime, pending orders in a 100-base point range around the pair were 62% to sell the GBP/USD.
On Friday, 50% of positions were short and long and pending orders were 60% to sell.