On Monday morning, the GBP/USD bounced off the resistance of the channel up pattern and passed the support of the monthly pivot point at 1.3028.
In the near term future, the pair was expected to reach for the support of the weekly simple pivot point and the 55-hour simple moving average near 1.2980.
Economic Calendar
The week's notable events are set to start on Tuesday. At 12:30 GMT, the US Consumer Price Index could cause a noteworthy move. In September and August this event caused a slight increase of volatility. The rate has moved 10.7 to 29.0 pips on the event.
On Wednesday, the US Producers Price Index is scheduled to be published at 12:30 GMT. The last release occurred during a major increase of volatility. The GBP/USD has moved 11.1 to 36.2 pips during the last five announcements. However, the September move of 36.2 was an anomaly.
Take into account that the September release occurred at the start of a ECB press conference and Unemployment Claims release. The large move most likely was caused by a combination of factors not the PPI on its own.
On Thursday, the weekly US Unemployment Claims will be out at 12:30 GMT. Since September, the publication caused moves of 15 to 20 pips.
On Friday, the US Retail Sales data is capable of causing slight increases of above normal volatility. However, in most cases the market barely reacts to this data. Namely, there are no sudden asset price and exchange rate adjustments.
The GBP/USD has moved from 10.5 to 25.7 pips on the release.
Click on the link below to find out more about the data releases.
GBP/USD short-term review
In the near term future, the rate was expected to decline to the support of the weekly simple pivot point at 1.2982 and the 55-hour simple moving average at 1.2972.If the rate passes these support levels, the GBP/USD would look for support in the 100 and 200-hour simple moving averages near 1.2950 and 1.2930.
On the other hand, if the 1.2980 level holds, the rate would retrace back up.
Hourly Chart
On the daily candle chart, on Friday, the 55-day simple moving average was pierced. The GBP/USD showed that it can pass this resistance level.
In the meantime, the 100-day SMA was approaching the rate and supported the 1.2800 level.
Daily chart
Read More: Technical Analysis
Short sentiment is gone
Since Thursday, 58% of trader open position volume on the Swiss Foreign Exchange was in short positions.
On Monday, the sentiment was 53% long, as traders had closed short positions and opened long positions.
Meanwhile, in the 100-pip range around the rate the pending orders were 51% to sell the GBP/USD pair.
Previously, the orders were 75% to sell.
Since Thursday, 58% of trader open position volume on the Swiss Foreign Exchange was in short positions.
On Monday, the sentiment was 53% long, as traders had closed short positions and opened long positions.
Meanwhile, in the 100-pip range around the rate the pending orders were 51% to sell the GBP/USD pair.
Previously, the orders were 75% to sell.