As the media revealed that the government of the United Kingdom was considering a reinstatement of the coronavirus lockdown, the GBP/USD plummeted.
On Monday morning, the drop was stopped by the support of a monthly pivot point at 1.2835.
Economic Calendar
Wednesday is a major day for other data releases. Throughout the whole day the Markit institute is set to publish Manufacturing and Services Purchasing Managers Indices. The indices are the result of a major survey of firm representatives.
At 08:30 GMT Pound traders are set to watch the UK Services and Manufacturing PMIs that can cause a move from 15.6 to 25.0 pips.
On the same day, at 13:45 the US PMIs will be released. A move of 12.9 to 35.5 pips has happened during the last half year during this release.
On Thursday, as accustomed, at 12:30 GMT, the US weekly Unemployment Claims could cause a move.
The week will end with a possible minor move from the US Durable Goods Orders at 12:30 GMT. The GBP/USD has barely moved during this event.
Click on the link below to see the historical reaction tables.
GBP/USD short-term review
Last week, the GBP/USD exchange rate failed to exceed the 1.3000 level. During Monday morning, the rate tumbled to the monthly S2 at 1.2835.If the given support level holds, it is likely that the currency pair could reverse north in the nearest future. Note that the pair could face the resistance range formed by the 55-, 100– and 200-hour SMAs, as well the weekly PP in the 1.2902/1.2949 area.
Otherwise, it is likely that the exchange rate could continue to depreciate. In this case the rate would have to exceed the weekly S1 located at the 1.2797 level.
Hourly Chart
On the daily candle chart, the rate could gain additional support from the 100 and 200-day simple moving averages, which were located near 1.2720.
In the meantime, note that the resistance of the 55-day SMA was broken last week.
Daily chart
Read More: Technical Analysis
Traders are neutral
Since Thursday, 52% of trader open position volume on the Swiss Foreign Exchange was in long positions.
On Monday, the open positions were balanced. 50% were short and the other 50% were long.
Meanwhile, in the 100-pip range around the rate the pending orders were 58% to buy the GBP/USD pair.
Previously, the orders were 59% to sell.
Since Thursday, 52% of trader open position volume on the Swiss Foreign Exchange was in long positions.
On Monday, the open positions were balanced. 50% were short and the other 50% were long.
Meanwhile, in the 100-pip range around the rate the pending orders were 58% to buy the GBP/USD pair.
Previously, the orders were 59% to sell.