The GBP/USD started to recover prior to reaching the support of the February 12 low level at 1.3775. However, the recovery was almost immediately stopped by the resistance of the 1.3870 level.
Meanwhile, take into account that the metal was being approached by the resistance of the 55-hour simple moving average.
Economic Calendar
On Wednesday, the US Consumer Price Index data could cause a minor move on USD assets at 13:30 GMT. The GBP/USD has moved from 8.6 to 25.8 pips on the announcement.
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 February 12 low level of 1.3775 provided the GBP/USD with support even before it was properly reached. The rate reversed its direction at mid-day on Friday. Since then, the rate has been testing the resistance of the 1.3830/1.3870 zone. However, it could be observed that most resistance was provided exactly by the 1.3870 level.In the near term future, the rate was expected to be reached by the resistance of the 55-hour simple moving average. This SMA could strengthen the 1.3870 mark and cause a decline to the 1.3775 level.
On the other hand, if the SMA fails, the pair might continue to trade sideways in the large range between 1.3775 and 1.3870.
Hourly Chart
On the daily candle chart, the rate is retracing back down, as it consolidates after reaching the 1.4200 mark.
In the meantime, note how the surge has occurred by being pushed up by the 55-day SMA. The rate overextended its surge when it reached the 1.4200 mark and moved too far away from the SMA. Due to that reason it became overbought.
In the near term future, the rate could look for support in the 55-day simple moving average, which recently reached above the 1.3720 level.
Daily chart
Read More: Technical Analysis
Traders take profits
On Monday, 57% of trader open position volume on the Swiss Foreign Exchange was in short positions.
On Friday, the sentiment was 61% short. Some traders had taken profits during the most recent decline.
Meanwhile, in the 100-pip range around the rate the pending orders were 65% to buy the GBP/USD pair.
Previously, 90% of orders were to buy.
On Monday, 57% of trader open position volume on the Swiss Foreign Exchange was in short positions.
On Friday, the sentiment was 61% short. Some traders had taken profits during the most recent decline.
Meanwhile, in the 100-pip range around the rate the pending orders were 65% to buy the GBP/USD pair.
Previously, 90% of orders were to buy.