On Tuesday note the US Consumer Price Index data set release at 13:30 GMT. The data release is set to impact the US Dollar's value. Higher than expected inflation would be seen as pressure on the Federal Reserve to hike interest rates or keep the higher for longer, which in turn would strengthen the US Dollar.
On Wednesday, the US Producer Price Index and Retail Sales data sets are also set to impact the US Dollar. Higher Retail Sales and higher inflation at the production level are also set to signal that the Federal Reserve has to and can increase interest rates.
GBP/USD short-term view
The ongoing decline of the GBP against the US Dollar is expected to look for support in the 1.2200 level. Afterwards, the 1.2150 level could slow down a decline, before the rate reaches the 1.2100 mark. The 1.2100 level has acted as support and resistance throughout October. In the case of the 1.2100 being passed, note that the 1.2050 level reversed the rate's decline in early October.On the other hand, a potential surge of the GBP/USD rate is set to face the 1.2250 and 1.2300 levels that have acted as resistance and support throughout November. Higher above, note the 1.2350 and 1.2400 levels that could impact the rate, despite not showing strength during the early trading of the month. Above these levels the November high of 1.2430 might cause another decline.
Hourly Chart
GBP/USD daily chart's review
On the daily candle chart, the GBP/USD pierced the upper trend line of the channel down pattern. However, the combination of the 1.2300/1.2450 range was enough to keep the rate down.Meanwhile, support is found in the 1.2035/1.2085 zone.
Daily chart
Read More: Technical Analysis
Traders are mostly long
During the week, open GBP/USD positions by Swiss Foreign Exchange traders were 62-65% long.
Meanwhile, trader pending orders in the 100 pip range around the rate were 58-68% to buy.
During the week, open GBP/USD positions by Swiss Foreign Exchange traders were 62-65% long.
Meanwhile, trader pending orders in the 100 pip range around the rate were 58-68% to buy.