The GBP/USD found support in the 1.3450 level on Monday. This level provided enough strength for the rate to start a surge, which by the middle of Tuesday's GMT trading hours had reached the 1.3600 level.
Meanwhile, a channel down pattern was spotted on the hourly candle chart. The pattern has been guiding the rate since the start of this year.
Economic Calendar
During the week there will be minor data sets published, which could cause initial reactions of up to 20 pips. Traders with close by tight stop losses should take into account the times of the macroeconomic data releases.
On Wednesday, the United States Bureau of Labor Statistics is set to publish the Consumer Price Index and Core Price Index at 13:30 GMT.
Afterwards, at 13:30 GMT, expect the weekly US Unemployment Claims. Despite the attention this release gets, we do not recommend monitoring it closely, as the last two releases caused moves below ten base points on the GBP/USD.
The week will end with the publication of the US Retail Sales and US Core Retail Sales at 13:30 GMT. In November and December, these data sets caused an increase of volatility above the average.
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 GBP/USD exchange rate has revealed a short-term descending channel.From a theoretical point of view, it is likely that the currency pair could trade downwards within the given channel in the short run. Note that the pair could gain support from the weekly S1 at 1.3505.
If the predetermined level holds, the exchange rate could reverse north and re-test the upper channel line. Otherwise, the rate could target the weekly S2 located at 1.3433.
Hourly Chart
On the daily candle chart, the pair has bounced off the resistance of the channel up pattern, which has guided the rate since September.
In regards to the future, due to the angle of the resistance line, the rate still has room for a surge. However, a decline to the 55- day SMA is likely, as the rate had done so each time after reaching the upper trend line.
Daily chart
Read More: Technical Analysis
Sell orders are close by
Since Friday, 63% 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 85% to sell the GBP/USD pair. Previously, the orders were 76% to buy.
Since Friday, 63% 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 85% to sell the GBP/USD pair. Previously, the orders were 76% to buy.