The surge of the GBP/USD was stopped by the 55-hour simple moving average, which started to push the rate down.
By the middle of London's trading session the rate had been pushed by the SMA to the 1.2070 level and was expected to continue to push the pair down.
US CPI incoming
On Tuesday, at 12:30 GMT the US CPI is set to be published. The event has caused moves from 14.8 to 23 base points on the GBP/USD charts.
On Wednesday, the UK Consumer Price Index is set to be published at 08:30 GMT. The event has caused moves from 13.6 to 23.1 pips.
On Thursday, UK Retail Sales will be published at 08:30 GMT. Since February the event has caused moves from 11.5 to 24.5 base points.
Later in the day, at 12:30 GMT, the US Retail Sales will be published. The GBP/USD has moved from 11.3 to 28.9 pips since April.
GBP/USD short-term review
The rate is being pushed down by the resistance of the 55-hour simple moving average.If the SMA continues to push the rate down, it should reach the historical low level of 1.2020, where it might find support and end the decline.
On the other hand, if the moving average fails to push the rate down, the pair might surge up to the weekly pivot point that is located at the 1.2090 level.
Hourly Chart
On the daily candle chart the rate remains in the borders of a channel down pattern. Note that recently the pair tested the lower trend line of the pattern, which held and was one of the causes of the surge on Monday.
In general, due to the angle of the pattern the rate could trade in any direction and it would still be in consistency with the channel.
Daily chart
Read More: Technical Analysis
Traders remain long
During Monday's London trading session, 73% of open GBP/USD position volume on the Swiss Foreign Exchange was in long positions.
On Tuesday, the sentiment increased to 74%.
Meanwhile, trader set up pending orders in the 100-pip range were bullish, as 57% of orders were set to buy and 43% were to sell.
The orders previously were 53% bearish.
On Tuesday, the sentiment increased to 74%.
Meanwhile, trader set up pending orders in the 100-pip range were bullish, as 57% of orders were set to buy and 43% were to sell.
The orders previously were 53% bearish.