The GBP/USD exchange rate remains to be under pressure of the 55-, 100- and 200-hour moving averages.
In theory, it is likely that some downside potential could continue to prevail in the market.
Economic Calendar
This week, monthly US inflation and retail sales data sets are bound to cause notable reactions, as they have done in the past. Namely, the US PPI on Wednesday and the US Retail Sales on Friday are being released at 12:30 GMT.
In addition, some market participants are bound to watch the UK GDP and Manufacturing data being released on Wednesday at 08:30 GMT.
GBP/USD short-term review
Yesterday, the GBP/USD exchange rate declined to the 1.2260 level. During Wednesday morning, the rate was trying to surpass the weekly and monthly S1s at 1.2290.If the given resistance level holds, it is likely that a reversal south could occur, and some downside potential could prevail in the market. Note that the nearest support level—the Fibo 38.20%, is located at 1.2190.
However, if the given resistance does not hold, it is likely that the British Pound could appreciate against the US Dollar in the short run. In this case the currency pair would have to surpass the 55– and 100-hour SMAs in the 1.2320/1.2350 range.
Hourly Chart
On the daily candle chart, the rate breached the ascending triangle pattern south.
Note that the rate is pressured by the 55-day moving average near 1.2420. Thus, some downside potential could prevail in the market.
Daily chart
Read More: Technical Analysis
Traders go long
On Wednesday, the sentiment the Swiss Foreign Exchange was 62% long.