The GBP/USD currency exchange rate recovered from the support of the 1.3850 mark and surged to the 1.4000 level.
Future forecasts were based upon whether or not the 1.4000 mark hold and reverses the pair's recovery.
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 support zone that surrounds the 1.3850 mark held. Namely, after testing the zone for nine hours, the GBP/USD began a recovery. By the middle of Wednesday's European trading hours, the rate had reached the 1.3990 level. In addition, the resistance of the 100-hour simple moving average was passed.In the near term future, the rate was likely going to reach for the 1.4000 mark. If this level is passed, the 200-hour SMA and the weekly simple pivot point at 1.4020 would provide resistance.
On the other hand, the 1.4000 level could hold and cause a decline. In this scenario the rate would look for support in the 55-hour simple moving average at 1.3937. If the SMA fails to provide technical support, the rate could once again reach for the resistance zone near 1.3850.
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 is intact
On Wednesday, 62% 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 63% to buy the GBP/USD pair. These could be the take profits and stop losses of the short traders.
On Wednesday, 62% 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 63% to buy the GBP/USD pair. These could be the take profits and stop losses of the short traders.