The GBP/USD reached the support that surrounds the 1.3850 mark and bounced off it. Afterwards, the 55-hour SMA was reached.
The near term future, depended on whether the 55-hour SMA manages to push the rate down and through the support of the 1.3850 mark.
Economic Calendar
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 GBP/USD has been gradually declining, as it has been pushed down by the 55-hour simple moving average. On Tuesday morning, the rate had reached the support zone of the early February high and late February low level. In the case of the zone being passed, the rate could look for support in the weekly S1 simple pivot point at 1.3804 and the 1.3800 round exchange rate level.If any of the mentioned levels provide significant support, the rate could retrace back up to the 55-hour simple moving average. In the case of the SMA failing to provide resistance, the rate could reach for the resistance cluster at 1.4023.
On the other hand, if the support levels fail, the rate could eventually reach for the 1.3700 mark and afterwards the weekly S2 simple pivot point at 1.3669.
Hourly Chart
On the daily candle chart, the rate is retracing back down, as it consolidates after reaching the 1.4200 mark.
In the meantime, note how the surge has occurred by being pushed up by the 55-day SMA. The rate overextended its surge when it reached the 1.4200 mark and moved too far away from the SMA. Due to that reason it became overbought.
Daily chart
Read More: Technical Analysis
Short sentiment declines
On Monday, 70% of trader open position volume on the Swiss Foreign Exchange was in short positions. Traders were waiting for a retracement back down.
On Tuesday, the sentiment was 64% short.
Meanwhile, in the 100-pip range around the rate the pending orders were 62% to buy the GBP/USD pair. These could be the take profits and stop losses of the short traders.
The orders were 69% to buy on Mondays.
On Monday, 70% of trader open position volume on the Swiss Foreign Exchange was in short positions. Traders were waiting for a retracement back down.
On Tuesday, the sentiment was 64% short.
Meanwhile, in the 100-pip range around the rate the pending orders were 62% to buy the GBP/USD pair. These could be the take profits and stop losses of the short traders.
The orders were 69% to buy on Mondays.