The main forecast scenario of Monday became reality. The GBP/USD pierced resistance at 1.3075 and reached for the 1.3100 level, which pushed the rate down.
In regards to the near term future, the rate will test the 1.3100 level. If the pair passes that level, it should test the technical resistance of the monthly pivot point at 1.3128.
The Bureau of Labor Statistics released the US Non-Farm Employment Change, which came better-than-expected of 196K compared with forecasted 172K. Note, that the US Average Hourly Earnings and the Unemployment Rate were released at the same time.
On March, the US economy generated more jobs than expected, and the confidence in the state of labor market strengthened. Also, the slowdown in wage inflation supported the Fed's resolution to lessen further policy tightening.
UK GDP on Wednesday morning
This week data releases are set to start on Wednesday. On that day the calendar is full of events that have impacted various currencies in the past.During the morning hours of the day the UK GDP and Manufacturing Production are expected to cause an impact on the GBP currency pairs. The data release is scheduled to occur at 08:30 GMT.
At 11:45 GMT all attention will be given to the ECB. At that time the ECB Main Refinancing Rate and Monetary Policy Statement will be published.
Although, note that these European Central Bank announcements do not create the moves on the EUR pairs. They are caused by the ECB Press Conference, during which the President of the ECB reveals new information by answering questions. The press conference starts at 12:30 GMT.
Meanwhile, exactly at 12:30 GMT USD pairs will be impacted by the publication of the US Consumer Price Index data. This can cause a move of up to 20 pips on USD pairs.
Wednesday will end with an above all fundamental event. The Federal Reserve Federal Open Market Committee will publish their Meeting Minutes.
In the publication the Fed will officially announced their future plans for US monetary policy.
That will be all on Wednesday. On Thursday, the week's events will end with the US Producers Price Index publication at 12:30 GMT. This event on average causes moves around 10 base points.
All of these events will be covered by Dukascopy Analytics. The covers of these events and the weekly economic calendar review can be watched on the Dukascopy Webinars channel.
GBP/USD short term review
The GBP/USD is squeezed in between 1.3075 and 1.3100. It is set to break out from this rangeIf the rate breaks the resistance of the 100 and 200-hour simple moving average together with the psychological resistance of the 1.3100 level, it will aim at the monthly pivot point at 1.3128.
On the other hand, the rate might pass the support of the weekly pivot point at 1.3075 and the 55-hour SMA at 1.3060. In that case the rate would have no technical support as low as 1.3000.
Hourly Chart
On the daily chart the rate also has dropped below technical significance levels. Due to that event the closest support levels are located at 1.3000.
At that level the lower trend line of the long term ascending channel together with the 200-day simple moving average are located at.
Although, on Tuesday it was spotted that the 200-day SMA is moving downwards to the weekly S1 at 1.2950. In addition, the 100-day SMA was approaching that level.
Daily chart
Since Monday, the total open position volume proportion at the Swiss Foreign Exchange was 51% long.
Meanwhile, the pending orders in the 100-pip range from the rate were bearish. Namely, 62% of the orders were set to sell.
The orders previously were neutral like the open position. It indicates that in the case of a downwards move the short to medium term oriented traders would sell.