The resistance of a rising wedge held and caused a decline, which broke the pattern. Namely, a sharp move of almost 150 base points reached the 1.3550 level.
On Tuesday, the GBP/USD currency exchange rate traded in limbo between the 1.3555 and 1.3615 levels.
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
It is likely that the currency pair could extend gains in the short term, as it is supported by the 200-hour moving average near 1.3545. A possible upside target is the psychological level at 1.3700.Meanwhile, note that the pair could face the resistance provided by the 55-hour moving average near 1.3630. Thus, the rate could trade sideways, supported by the weekly S1 at 1.3508.
Hourly Chart
On the daily candle chart, the pair has bounced off the resistance of the channel up pattern, which has guided the rate since September.
In regards to the future, due to the angle of the resistance line, the rate still has room for a surge.
Daily chart
Read More: Technical Analysis
Short sentiment grows
On Tuesday, 69% of trader open position volume on the Swiss Foreign Exchange was in short positions.
On Monday, the sentiment was 64% short.
Meanwhile, in the 100-pip range around the rate the pending orders were 51% to sell the GBP/USD pair.
On Tuesday, 69% of trader open position volume on the Swiss Foreign Exchange was in short positions.
On Monday, the sentiment was 64% short.
Meanwhile, in the 100-pip range around the rate the pending orders were 51% to sell the GBP/USD pair.