The GBP/USD has reached the 1.2900 level, where it was pushed by hourly simple moving averages.
The rate was expected to trade sideways below this level until the US GDP release and the Federal Reserve Rate announcement.
Economic Calendar
This week the GBP/USD is bound to be affected by US data and an expected rate cut.On Wednesday, October 30, the US ADP Non-Farm Employment Change data will be published at 12:30 GMT. The GBP/USD has moved from 12.9 to 28.4 pips on the announcement.
On the same day, the US Advance GDP will be published at 12:30 GMT. This is the top US GDP data release. It has caused moves on the GBP/USD charts from 11.5 to 36.1 pips since July 2018.
Moreover, the FOMC Statement and the Federal Funds Rate are scheduled to be published at 18:00 GMT. The announcement has caused reactions from 32.9 to 62.5 base points since January 2019.
On Friday, November 1, the US Employment data set will be on focus - the Average Hourly Earnings, the Non-Farm Employment Change and the Unemployment Rate data will be published at 12:30 GMT.
This event has caused moves from 21.7 to 51.3 pips since June 2019.
Also on Friday, the ISM Manufacturing PMI survey results will be published at 14:00 GMT. The PMI release has caused reactions from 13.2 to 28.9 base points since June of this year.
For more detailed information take a look at the 28.10-01.11 Event Historical Reactions publication.
Read More: 28.10-01.11 Event Historical Reactions
GBP/USD short-term review
On Tuesday, the GBP/USD exchange rate tried to surpass the resistance level formed by the monthly R2 at 1.2904. During today's morning, the rate was testing the given resistance.Given that the currency pair is supported by the 55– and 100-hour moving averages at 1.2850, it is likely that some upside potential could prevail in the market. Note that the pair would have to surpass the Fibo 38.20% at 1.2918 as well.
If the given resistance hold, it is likely that the British Pound could consolidate against the Greenback within the following trading session. Also, it is unlikely that bears could prevail, and the rate could drop lower than the psychological level at 1.2820.
Hourly Chart
On the daily candle chart, the bounce off from the 1.3000 mark has provided a reference point for pattern charting. An ascending channel pattern that represents the recovery started in August has been added to the chart.
In general, the rate can trade in any direction in the borders of the pattern. It can go down to the 200-day SMA, trade sideways near the 1.2800 mark or attempt to pass the pivot points that provide resistance above it.
Daily chart
Read More: Technical Analysis
Short sentiment increases even more
On Tuesday, 62% of open GBP/USD position volume on the Swiss Foreign Exchange was in short positions. By the middle of Wednesday's trading the sentiment was 67% short.
Traders had been short since last week.
Meanwhile, trader orders were bearish. In the 100-pip range, 79% of orders were to sell and 21% were to buy.
Previously, the orders were 57% to sell.
In general, the massive short sentiment is present like on any other pairs, where the USD is the pair being sold. Namely, traders expect the USD to surge upon today's announcements.
Traders had been short since last week.
Meanwhile, trader orders were bearish. In the 100-pip range, 79% of orders were to sell and 21% were to buy.
Previously, the orders were 57% to sell.
In general, the massive short sentiment is present like on any other pairs, where the USD is the pair being sold. Namely, traders expect the USD to surge upon today's announcements.