On Monday, the GBP/USD traded near the 1.3100 level. By the middle of the day's GMT trading hours, the rate was expected to test resistance levels at 1.3140.
In the meantime, the currency exchange rate revealed a medium scale channel down pattern.
Economic Calendar
As the last week of the month, the following week is expected to be a quiet one. However, there are events that should be watched in the case a sharp move occurs.
On Wednesday, at 12:30 GMT traders should watch the release of the US Durable Goods Orders data. The event is capable of causing volatility increases above average level.
On Thursday, the US Preliminary GDP and the US Unemployment claims are set to be published. Due to these events usually not being released at the same time, the past reactions need to be combined. Namely, in the case of the same direction surprise the volatility pips need to be added one to another. On the other hand, different results shown by each data set could cancel one another out.
Click on the link below to find out more about the data releases.
GBP/USD short-term review
Last week, the GBP/USD exchange rate revealed a short-term descending channel. During today's morning, the rate pierced the 200-hour SMA near 1.3120.From a theoretical point of view, it is likely that some upside potential could prevail in the market, and the currency pair could target the upper channel line located circa 1.3230.
In the meantime, it is likely that the pair could face the resistance area formed by the 55– and 100-hour SMAs, as well the weekly PP in the 1.3140/1.3165 range. Thus, the rate could trade downwards along the lower channel line in the short run.
Hourly Chart
On the daily candle chart, the pair is trading in a channel up pattern, which has guided the rate since the end of June
In the meantime, the rate is in the overbought zone, as it is trading far above the 55-, 100- and 200-day moving averages. This signals that the rate needs to trade sideways or retrace back down.
Daily chart
Read More: Technical Analysis
Traders remain short
Since Friday, 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 56% to buy the GBP/USD pair.
Previously, 55% of orders were to buy.
Since Friday, 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 56% to buy the GBP/USD pair.
Previously, 55% of orders were to buy.