The GBP/USD has started the week by surging above the 1.3900 level. The rate had found support for a surge in the 1.3780 level.
At mid-day on Monday, the currency exchange rate was expected to test the weekly R1 simple pivot point at 1.3923.
Economic Calendar
The week is expected to have a lot of data releases, which could impact the currency exchange rate from both the GBP and USD sides.
On Wednesday morning, at 07:00 GMT the GBP/USD could move from 9.7 to 16.1 pips due to the release of the United Kingdom Consumer Price Index.
On the same day, at 13:30 GMT, the US Retail Sales and Core Retail Sales could cause a move of 10.3 to 26.3 pips, as it has done since September. However, at the same time, the US Producer Price Index and Core Producer Price Index are set to be published. This event has caused moves from 11.1 to 36.2 pips.
If both data sets reveal a positive or negative surprise, compared to the market forecast, the impact could be combined. On the other hand, the data could contradict one another and cancel out the effect of an impact.
Also on Wednesday, at 19:00 GMT the FOMC Meeting Minutes PDF document will be released. Note that the impact of the meeting minutes occurs slowly not suddenly, as the market participants read and interpret the meeting minutes.
On Thursday, market participants are set to watch the weekly US Unemployment Claims at 13:30 GMT. The rate has moved from 7.6 to 14.9 pips on the announcement since January 14.
On Friday morning, the UK Retail Sales data will be out at 07:00 GMT. The GBP/USD has moved from 6.4 to 20.6 pips on the announcement.
Friday will be the day that the Markit Purchasing Managers Indices are published. These survey results reveal what various sector purchasing managers are thinking about the future outlook of their respective sectors. In general, the markets look at the results of the services and manufacturing sectors.
The UK Services and Manufacturing PMIs are set to be published at 09:30 GMT. This event has caused moves from 13.0 to 26.7 pips since September.
The week will end for the GBP/USD with the US PMIs at 14:45 GMT. The release could cause a move from 7.8 to 30.5 pips.
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
During today's morning hours, the GBP/USD exchange rate was testing the resistance level—the weekly R1 at 1.3923.If the predetermined resistance level holds, it is likely that the currency pair could reverse south in the nearest future. Note that the pair could gain support from the 55– and 100-hour SMAs, as well the weekly PP in the 1.3802/1.3840 area.
However, if the given resistance does not hold, the British Pound could continue to extend gains against the US Dollar. In this case the exchange rate could face the resistance level—the weekly R2 at 1.3988.
Hourly Chart
On the daily candle chart, the pair has broken the resistance of the previous 2021 high level and surged.
In regards to the future, the pair was expected to test the upper trend line of the channel up pattern, which has guided the rate since September.
Daily chart
Read More: Technical Analysis
Traders are mostly short
Since Friday, 74% of trader open position volume on the Swiss Foreign Exchange was in short positions.
During the middle of Thursday's European trading hours, the sentiment was 72% short.
Meanwhile, in the 100-pip range around the rate the pending orders were 66% to sell the GBP/USD pair.
Since Friday, 74% of trader open position volume on the Swiss Foreign Exchange was in short positions.
During the middle of Thursday's European trading hours, the sentiment was 72% short.
Meanwhile, in the 100-pip range around the rate the pending orders were 66% to sell the GBP/USD pair.