During the first half of Wednesday's trading, the GBP/USD currency exchange rate fluctuated between the support of the 100-hour simple moving average and the resistance of the 55-hour SMA.
The near term future was dependant on which one of the two simple moving averages breaks first.
Economic Calendar
On Wednesday, 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 Wednesday morning hours, the GBP/USD exchange rate was testing the support provided by the 100-hour SMA near 1.3870.It is likely that the currency pair could be pushed down by the 55-hour SMA and the weekly R1 in the 1.3910/1.3923 range. The pair could decline to the support area formed by the 200-hour SMA and the weekly PP in 1.3802/1.3820.
In the meantime, if the 100-hour SMA holds, the exchange rate could trade upwards in the short term. In this case the rate could target the weekly R2 located at 1.3988.
Hourly Chart
On the daily candle chart, the pair has reached the upper trend line of the channel up pattern, which had guided the rate since September.
In regards to the future, the rate should trade sideways or retrace back down to consolidate its gains.
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.
On Wednesday, the sentiment changed, as 72% of volume was short.
Meanwhile, in the 100-pip range around the rate the pending orders were 54% to sell the GBP/USD pair.
On Tuesday, the orders were 55% to sell.
Since Friday, 74% of trader open position volume on the Swiss Foreign Exchange was in short positions.
On Wednesday, the sentiment changed, as 72% of volume was short.
Meanwhile, in the 100-pip range around the rate the pending orders were 54% to sell the GBP/USD pair.
On Tuesday, the orders were 55% to sell.