Since Monday morning, the GBP/USD had recovered, as the rate reached back up to trade in the 1.3400/1.3500 zone.
Previously, over the weekend there were statements made by one of the UK Ministers, which signalled that the UK would not back down from its position on trade with the EU. Moreover, the minister of health announced a new strain of the coronavirus in its country. The news forced various countries to shut off travel to the UK.
In regards to the near term future, the technical charts become secondary, as there is a scheduled briefing of EU envoys by the EU Head Negotiator at 15:00 GMT. This event is likely to fundamentally impact the Pound.
Economic Calendar
The week of Christmas is set to have an early market closing on Thursday in many countries and reduced liquidity due to people being on holidays. However, there are still noteworthy data sets being released in the days before people are off from work.
All of the data releases of the week are scheduled to occur on 13:30 GMT.
Namely, on Tuesday, the US Final GDP could cause volatility. The GBP/USD moved from 10.9 to 39.4 pips on the release since September 2019.
Last but not least, on Thursday, the US Durable Goods Orders and Core Durable Goods Orders data will be released. The rate has moved from 9.5 to 21.9 pips on the announcement since July 2020.
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
Since Monday, the GBP/USD exchange rate has been testing the resistance provided by the weekly PP and the 100-hour SMA near 1.3480.It is likely that the currency pair could gain support from the 55– and 200-hour SMAs near 1.3410. Thus, some upside potential could prevail in the market, and the pair could target the 1.3600 mark.
However, if the predetermined resistance holds, it is likely that the exchange rate could re-test the support level—the weekly S1 at 1.3329. If the given support holds, the rate could trade sideways.
Hourly Chart
On the daily candle chart, the rate has bounced off the lower trend line of a channel up pattern, which was strengthened by the 55-day SMA and a 61.80% Fibonacci retracement level.
However, the following recovery was stopped by the resistance of the previously passed August high level at 1.3485.
Daily chart
Read More: Technical Analysis
Traders are short
On Tuesday, 70% of trader open position volume on the Swiss Foreign Exchange was in short positions.
Meanwhile, in the 100-pip range around the rate the pending orders were 72% to sell the GBP/USD pair.
On Tuesday, 70% of trader open position volume on the Swiss Foreign Exchange was in short positions.
Meanwhile, in the 100-pip range around the rate the pending orders were 72% to sell the GBP/USD pair.