The support of the 200-hour SMA did not hold, as the GBP/USD declined below it on Friday. Moreover, at the start of London trading, the pair had reached the 1.3900 level. Namely, the pair had returned to the February 18 level.
In the near term future, the rate was expected to test a support zone that surrounds the 1.3850 mark.
Economic Calendar
Next week, notable data releases start on Monday. On that day, the US ISM Manufacturing PMI could cause a GBP/USD move from 12.7 to 19.6 pips.
On Wednesday, the US ADP Non-Farm Employment Change at 13:15 GMT will be on the headlines. However, by large, the market does not care, as since December 2 the rate has moved only 8.0 to 16.7 pips on the release.
On the same day, at 15:00 GMT the US ISM Non-Manufacturing PMI could cause a move from 11.8 to 38.4 pips.
On Friday, at 13:30 GMT the US will publish its monthly employment data. The release will consist of the Average Hourly Earnings, Non-farm Employment Change and Unemployment Rate. The GBP/USD has moved from 18.5 to 29.3 pips on the publication since October.
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
The rate is heading to the support zone that is located from 1.3830 to 1.3870. This zone provided both resistance and support in the middle of February. However, note that the pivot point at 1.3886 could provide support.If the mentioned support levels hold, the GBP/USD could recover to the 1.4000 mark, which could be strengthened by the 200-hour simple moving average.
On the other hand, if the support levels fail, the rate could gradually decline by looking for support in 1.3800, 1.3775, 1.3750 and 1.3700.
Hourly Chart
On the daily candle chart, the rate continues to surge in a broad channel up pattern, which has guided the rate since March.
Meanwhile, note that the rate could eventually test the resistance of the 2018 high level at 1.4377.
Daily chart
Read More: Technical Analysis
Short traders take profits
Since Wednesday, 75% of trader open position volume on the Swiss Foreign Exchange was in short positions. Traders were waiting for a retracement back down.
On Friday, some of the traders took profits, as 71% of volume remained short.
Meanwhile, in the 100-pip range around the rate the pending orders were 58% to buy the GBP/USD pair. These could be the take profits and stop losses of the short traders.
The orders were 56% to sell on Thursday.
Since Wednesday, 75% of trader open position volume on the Swiss Foreign Exchange was in short positions. Traders were waiting for a retracement back down.
On Friday, some of the traders took profits, as 71% of volume remained short.
Meanwhile, in the 100-pip range around the rate the pending orders were 58% to buy the GBP/USD pair. These could be the take profits and stop losses of the short traders.
The orders were 56% to sell on Thursday.