- The Swiss market is 56% bullish on the pair
- 53% of pending orders in the 100-pip range are set to SELL
- US PPI and Crude Oil Inventories on Wednesday
On Wednesday, the GBP/USD traded near previous trading day's session, but was set to be pushed higher by SMAs into a resistance level at the 1.3040 mark. If the 1.3040 gets passed, the rate would surge above the 1.31 level.
The British Pound appreciated against the US Dollar, following UK Average Earnings Index release on Tuesday at 08:30 GMT. The GBP/USD exchange currency rate gained 17 pips or 0.13% during a minute, right after the release.
The Office for National Statistics released the Average Earnings Index 3m/y better-than-expected of 2.6% compared with forecasted 2.4 %. The Index shows the change in the price businesses and the government pay for labour, including bonuses.
David Freeman, the ONS head of labour market statistics said: "With the number of people in work little changed, employment growth has weakened. However, the labour market remains robust, with the number of people working still at historically high levels, unemployment down on the year and a record number of vacancies. Meanwhile, earnings have grown faster than prices for several months, especially looking at pay excluding bonuses."
US data will come in on Wednesday
During the first two days of the week traders already experienced two UK data releases, which caused notable fluctuations in the financial markets. Although, the UK GBP affecting macroeconomic data releases are over.
However, US data is about to be released on Wednesday. The US Producers Price Index will be out on Wednesday at 12:30 GMT. The data release will be a part of the weekly macro release review webinar, which will begin on the bank's live webinar platform at 12:00 GMT.
In addition during that day the US Crude Oil Inventories will also cause a reaction in the financial markets. Namely, oil prices will increase volatility at 14:30 GMT.
Meanwhile, if you are just concentrating on the GBP/USD, then prepare for Thursday. On Thursday, at 11:00 GMT the official bank rate of the Bank of England will be published at 11:00. It is expected to cause fluctuations in the range from 40 to even 180 base points in the GBP/USD.
GBP/USD short term review
In regards to the near future, most likely the rate will move downwards to trade near the 1.2960 mark due to the resistance of the weekly R1 at the 1.3040 level, which together with the August high has provided strong resistance in the past.Be careful, any fundamental Brexit news may break most technical indicators and can ignore all the rules to push the rate to go in any direction. Watch out for news!
Hourly Chart
On the daily chart one can clearly observe that the recent surge is a part of an ascent in the previously drawn ascending pattern of the daily chart.
If its upper trend line holds its ground and forces the pair into a move to the lower trend line of the pattern, it will be assumed that it will be the one to guide the currency exchange rate to the upper trend line of a larger dominant channel down pattern.
Meanwhile, note that, if one draws the larger pattern in a slightly different way, the rate has already reached its upper trend line and bounced off of it. It is quite common that due to various drawing methods, there are actively providing resistance and support more than one pattern of the same size and direction.
Daily chart
The Swiss trader sentiment remains largely bullish. Namely, traders of the Swiss Foreign Exchange were long in 56% of all of their open positions.
In the meantime, trader set up orders, which indicate where the rate most likely will go next, are set to buy the pair in 54% of all cases. On Tuesday, the orders were set to sell in 51% of all cases. This fact indicates that the retail traders are undecided in regards to the pair's short term future.
Meanwhile, OANDA traders remain largely bullish, as 66% of open positions are long at the brokerage. In the meantime, traders at SAXO Bank are 54% long on the GBP/USD pair. The sentiments have slightly increased since Tuesday.
Spreads (avg, pip) / Trading volume / Volatility