Since the middle of Tuesday's European trading hours, the GBP/USD has been testing the resistance of the 200-hour simple moving average. By the middle of Wednesday's trading, the SMA had reached the 1.3905 level and another test of resistance was ongoing.
Future forecasts were based upon whether or not the SMA's resistance holds.
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 surge of the GBP/USD found resistance in the 200-hour simple moving average, which caused a retracement down. By the middle of Wednesday's GMT trading hours, the rate was once again approaching the resistance of the SMA.In the case of the SMA being passed, the pair could reach for the weekly R1 simple pivot point at 1.3982. If the pivot point does not provide resistance, the GBP/USD could reach the 1.4000 mark. Note that the weekly simple pivot point at 1.3881 did not impact the rate during this week. Due to that reason the weekly R1 might do the same.
On the other hand, if the SMA pushes the rate down, it would look for support in the 55 and 100-hour simple moving averages, which were located at 1.3855 and 1.3868.
Hourly Chart
On the daily candle chart, the rate has found support in the 1.3800 mark and ended its retracement down that started after the pair encountered resistance at 1.4200.
In the meantime, note how the prior surge 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 1.3740 level.
Daily chart
Read More: Technical Analysis
Sell orders are gone
On Wednesday, 55% of trader open position volume on the Swiss Foreign Exchange was in short positions.
On Tuesday, the sentiment was 56% short.
Meanwhile, in the 100-pip range around the rate the pending orders were 52% to sell the GBP/USD pair.
Previously, 67% of orders were to sell.
On Wednesday, 55% of trader open position volume on the Swiss Foreign Exchange was in short positions.
On Tuesday, the sentiment was 56% short.
Meanwhile, in the 100-pip range around the rate the pending orders were 52% to sell the GBP/USD pair.
Previously, 67% of orders were to sell.