The decline of the GBP/USD reached far lower than it was expected on Tuesday. Namely, on Wednesday morning, the pair was below the 1.2950 mark.
In the future, the decline was expected to continue, as there was no support as low as 1.2840.
Economic Calendar
There are only couple events expected that could affect the GBP/USD rate.
On Thursday, at 12:30 GMT a group of minor US data sets is scheduled to be published. The set will consist of US Producers Price Index, Core Price Index and Unemployment claims. In most cases these data releases cause insignificant moves.
The week will end with the publication of the US Consumer Price Index and Core Consumer Price Index changes. This event had been insignificant and did not cause increases of volatility since April. However, in August, there were notable moves on all USD pairs.
Click on the link below to see the historical reaction tables.
GBP/USD short-term review
The rate paused its decline and consolidated by trading sideways on Wednesday morning GMT trading hours. However, the rate was expected to continue the decline.A decline would aim at the combined support of the 1.2850 level, the weekly S3 simple pivot point and the monthly S2 simple pivot point.
On the other hand, the rate could trade sideways above the round exchange rate's psychological support at 1.2900.
Hourly Chart
On the daily candle chart, as expected the pair is approaching the support of the daily simple moving averages. Namely, on Wednesday, the rate was approaching the 55-day SMA, which was located at 1.2895.
Note that the SMA could support the 1.2900 level.
Daily chart
Read More: Technical Analysis
Short sentiment decreases
On Wednesday, 61% of trader open position volume on the Swiss Foreign Exchange was in short positions.
Previously, since Monday, 66% of volume was short.
Meanwhile, in the 100-pip range around the rate the pending orders were 54% to sell the GBP/USD pair.
Previously, the orders were 68% to buy.
On Wednesday, 61% of trader open position volume on the Swiss Foreign Exchange was in short positions.
Previously, since Monday, 66% of volume was short.
Meanwhile, in the 100-pip range around the rate the pending orders were 54% to sell the GBP/USD pair.
Previously, the orders were 68% to buy.