From a technical analysis perspective, the pair has broken the resistance zone at 1.2500/1.2515. The follow up surge eventually encountered resistance at 1.2580, before retracing to look for support. At mid-day on Monday, the 1.2500/1.2515 range, the 50-hour simple moving average and the weekly simple pivot point at 1.2510 were providing support. Economic Calendar
This week, the top event of the week will be the announcement of the US Federal Reserve Federal Funds Rate at 18:00 GMT. The Fed is expected to hike its base interest rate from 5.00% up to 5.25%. A larger increase or no increase at all would cause a sharp adjustment of the value of the US Dollar. Subsequently all of financial markets would be impacted. Meanwhile, note that the Fed has stated that rate cuts are not going to happen in 2023.
The rate publication is scheduled to be followed by the Press Conference of the Chairman of the Federal Reserve Jerome Powell at 18:30 GMT. In most cases, comments made by the head of the central bank cause more volatility than the rate announcement. Sometimes, the comments of Powell reverse the direction of the USD.
In regards to the Fed decision, note that the head of the central bank has commented in the past that they monitor the PCE Core Inflation data. On Friday, the data set revealed that month on month the personal consumption expenditures increased by 0.3%.
GBP/USD short-term view
A resumption of the GBP surge against the US Dollar would face resistance at 1.2580, 1.2600 and the weekly R1 simple pivot point at 1.2634.However, a decline below 1.2500 is most likely going to look for support in the 100 and 200-hour simple moving averages near 1.2480 and 1.2460. Further below, take into account the weekly S1 simple pivot point at 1.2437.
Hourly Chart
GBP/USD daily chart's review
On the daily candle chart, the pair has passed the resistance zone of the 2023 high levels at 1.2300/1.2450. Higher above, the late 2022 high level zone could stop the pair at 1.2600.However, for most of April the GBP/USD has been consolidating by trading rather flat.
Daily chart
Read More: Technical Analysis
Traders are short on GBP/USD
On Monday, traders were 71% bearish, as 71% of trader open position volume on the Swiss Foreign Exchange was in short positions.
In the meantime, pending orders in a 100-base point range around the pair were 53% to buy the GBP/USD.
On Monday, traders were 71% bearish, as 71% of trader open position volume on the Swiss Foreign Exchange was in short positions.
In the meantime, pending orders in a 100-base point range around the pair were 53% to buy the GBP/USD.