At midnight to Wednesday, the GBP/USD broke the resistance of the 55 and 100-hour simple moving averages and began a surge. By the middle of the day's GMT trading hours, the rate found resistance in the 1.3615 mark. At this level the resistance zone of the December high levels was located at.
The future scenarios depended on what would happen at the resistance zone.
Economic Calendar
The first week of the year is bound to have notable data releases. The top among them are the release of the US Federal Open Markets Committee Meeting Minutes and the US monthly employment data sets.
On Tuesday, at 15:00 GMT, a minor move could be caused by the release of the US ISM Manufacturing PMI. The GBP/USD has moved 11.1 to 29.5 pips on the announcement since August.
On Wednesday, the mentioned FOMC Meeting Minutes are set to be released at 19:00 GMT. Expect a minor move from 7.2 to 10.1 pips. Note that there was an anomaly of 20.0 pips in August.
On Thursday, at 13:30 GMT, the US Unemployment Claims could cause a minor move on USD pairs and assets. In addition, on the same day, at 15:00 GMT the US ISM Non-Manufacturing PMI results will be published.
The release have caused moves, respectively, from 9.3 to 16.0 and 13.3 to 21.1 base points.
The week will end with the release of three US employment data sets. The releases will occur on Friday at 13:30 GMT. This event has caused moves from 18.5 to 32.4 pips since August.
Click on the link below to find out more about the data releases of this and other currency exchange rates.
GBP/USD short-term review
The rate has approached the resistance zone of the December high levels. In the case of this zone being passed, the GBP/USD could reach for the weekly R1 simple pivot point at 1.3734. However, prior to reaching this level, the rate could face the resistance of the 1.3650 and 1.3700 levels.On the other hand, in the case of the resistance holding, the pair should either trade sideways or retrace back to the support of the 55, 100 and 200- hour simple moving averages.
In the meantime, take into account the supporting trend line, which is drawn by connecting the December 21 and 28 low levels.
Hourly Chart
On the daily candle chart, the resistance of the December high levels can be observed better. It can be seen that it could force the rate into trading sideways in the borders of a channel up pattern.
Daily chart
Read More: Technical Analysis
Traders are short
Since Tuesday, nearly 70% of trader open position volume on the Swiss Foreign Exchange was in short positions. The sentiment had shortly decrease during a couple of trading sessions.
Meanwhile, in the 100-pip range around the rate the pending orders were 72% to sell the GBP/USD pair.
Since Tuesday, nearly 70% of trader open position volume on the Swiss Foreign Exchange was in short positions. The sentiment had shortly decrease during a couple of trading sessions.
Meanwhile, in the 100-pip range around the rate the pending orders were 72% to sell the GBP/USD pair.