The US Consumer Price Index will impact the market this week. Everything else is noise or will have less impact. CPI data sets are scheduled to be published on Wednesday at 12:30 GMT.
Prior to the CPI, on Tuesday, at 12:30 GMT the United States Producer Price Index will be published. The data shows price level changes at the producer level. Usually, a price increase at this level results in a price hike at the consumer level. Namely, PPI grows before the CPI.
On Wednesday, together with the CPI data another data set will be published. The Retail Sales data is expected to provide additional insight into the situation in the United States. It could reveal that despite higher prices, people keep buying goods. On the other hand, the Retail Sales might show that the consumer has had enough and has reduced spending.
GBP/USD hourly chart analysis
A broader surge would most likely face resistance in the 1.2600 and 1.2700 levels. In addition, take into account the weekly R1 and R2 simple pivot point at 1.2697 and 1.2670.On the other hand, a decline of the Pound against the US Dollar has the support of the 50, 100 and 200-hour simple moving averages and the weekly simple pivot point at 1.2520. If the pair declines, it is almost immediately going to look for support in the 1.2500 mark. If the 1.2500 does not hold, the rate could once again look for support in the 1.2460/1.2470 range.
Hourly Chart
GBP/USD daily candle chart analysis
Quoting prior analysis: "On the daily candle chart, the change in fundamentals is expressed by the rate breaking out of the channel down pattern. The pattern represented the decline that occurred as the Dollar strengthened throughout the last months. Data was being released which indicated that the US monetary policy makers cannot cut rates. Latest events show that it can still be done.However, the 50 and 100-day simple moving averages are still acting as resistance near 1.2600/1.2630. These levels have to be passed for the pair to establish a new trend. It is highly likely that the resolution to the situation will occur after the UK events are over."
Today, we can clearly observe a smaller scale channel up pattern that can be drawn by connecting the April low with the recent May low level.
Daily chart
Read More: Technical Analysis
Traders are long
On Monday, traders were 59% long, as that proportion of all open position volume on Swiss Foreign Exchange was in bullish positions.
Meanwhile, pending orders in the 100-pip range around the rate were 83% to sell.
Meanwhile, pending orders in the 100-pip range around the rate were 83% to sell.