The squeeze of the GBP/USD between the 55 and 100-hour SMAs ended with a break out to the bottom. However, it was immediately stopped by the support of the 200-hour SMA.
The 200-hour SAM provided enough support on Thursday morning for the rate to surge up above the 55 and 100-hour SMAs and the weekly R1 simple pivot point.
Economic Calendar
On Thursday, market participants are set to watch the weekly US Unemployment Claims at 13:30 GMT. The rate has moved from 7.6 to 14.9 pips on the announcement since January 14.
On Friday morning, the UK Retail Sales data will be out at 07:00 GMT. The GBP/USD has moved from 6.4 to 20.6 pips on the announcement.
Friday will be the day that the Markit Purchasing Managers Indices are published. These survey results reveal what various sector purchasing managers are thinking about the future outlook of their respective sectors. In general, the markets look at the results of the services and manufacturing sectors.
The UK Services and Manufacturing PMIs are set to be published at 09:30 GMT. This event has caused moves from 13.0 to 26.7 pips since September.
The week will end for the GBP/USD with the US PMIs at 14:45 GMT. The release could cause a move from 7.8 to 30.5 pips.
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
By the middle of Thursday's European trading hours, the GBP/USD had passed the resistance of the weekly R1 simple pivot point.In theory, the rate should surge, as it had no technical resistance as high as the weekly R2 at 1.3988. However, the pair would first test the 1.3950 mark, which caused the rate's this week's decline.
If the 1.3950 mark provides resistance, the GBP/USD would once again decline and look for support in the 55, 100 and 200-hour simple moving averages that were located near 1.3885 and 1.3840.
Hourly Chart
On the daily candle chart, the pair has reached the upper trend line of the channel up pattern, which had guided the rate since September.
In regards to the future, the rate should trade sideways or retrace back down to consolidate its gains.
Daily chart
Read More: Technical Analysis
Buy orders are close by
On Thursday, 74% of trader open position volume on the Swiss Foreign Exchange was in short positions.
The sentiment had been like that since last Friday. It had only shortly dipped to 72% short on Wednesday.
Meanwhile, in the 100-pip range around the rate the pending orders were 72% to buy the GBP/USD pair. The buy orders could be the close by stop losses of the short positions.
On Wednesday, the orders were 54% to sell.
On Thursday, 74% of trader open position volume on the Swiss Foreign Exchange was in short positions.
The sentiment had been like that since last Friday. It had only shortly dipped to 72% short on Wednesday.
Meanwhile, in the 100-pip range around the rate the pending orders were 72% to buy the GBP/USD pair. The buy orders could be the close by stop losses of the short positions.
On Wednesday, the orders were 54% to sell.