This week, the top event is scheduled for Thursday. At 13:30 GMT, the United States Consumer Price Index is set to be published. This data set reveals how prices have changed at the consumer level. It is watched by the Federal Reserve to determine the future course of the US monetary policy.
On Friday, at 13:30 GMT, inflation at the producer level will be revealed, as the US Producer Price Index will be published. It is considered that producer level inflation eventually turns into consumer inflation, as producers increase consumer goods prices.
Lower than expected or at forecast inflation is expected to cause a decline of the US Dollar, as it shows that the Federal Reserve can cut interest rates. On the other hand, a return of inflation is set to cause a surge of the USD, as the Fed has to keep rates high or even return to rate cuts.
GBP/USD hourly chart analysis
A decline below the moving averages and the 1.2700 mark could eventually reach the weekly S1 simple pivot point at 1.2610 and the support range at 1.2590/1.2610. Note that the range has held on for almost a month. Meanwhile, the 1.2700 mark, pivot points and moving averages have been mostly ignored.However, a resumption of the surge of the Pound against the US Dollar is set to face the 1.2760 level and afterwards the range at 1.2780/1.2790, before testing the 1.2800 mark.
Hourly Chart
GBP/USD daily candle chart analysis
On the daily candle chart, the pair has passed below the supporting trend line that had pushed the rate up since early October. In the case of the rate continuing to decline, support might be provided by the combination of the 50 and 200-day simple moving averages near 1.2550.Daily chart
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Traders are short
On Tuesday, traders were 59% short, and pending orders in the 100 pip range around the rate were 53% to buy.
During Wednesday's trading hours, open positions were 57% short.
Meanwhile, the pending orders were set up for further opening of short positions, as 57% of orders were to sell.
During Wednesday's trading hours, open positions were 57% short.
Meanwhile, the pending orders were set up for further opening of short positions, as 57% of orders were to sell.