This week, the markets could move due to the testimony of the US Federal Reserve Chairman Jerome Powell's testimony before the US Congress. New information could move the US Dollar.
On Thursday, a data release could move the financial markets. The United States Bureau of Labor Statistics is set to release the US Consumer Price Index data sets at 12:30 GMT. Higher than expected inflation would indicate that the US Fed cannot cut interest rates. Lower inflation would signal that rate cuts are possible.
On Friday, more inflation data will be published. The US Producer Price Index data sets will reveal how prices have changed at the manufacturing level. Due to this release coming after the CPI, it is highly likely that the reaction will be minor.
GBP/USD hourly chart analysis
The ongoing surge could be slowed down by the 1.2860 level and the weekly R1 simple pivot point at 1.2881. Higher above, the 1.2900 mark is most likely going to act as resistance.In the case of a decline of the Pound against the Dollar, the 1.2800/1.2820 range is bound to act as support. Moreover, this range will be strengthened by the 50-hour SMA. Below the range, take into account the combination of the 1.2750 level, the weekly simple pivot point at 1.2748, the 100-hour simple moving average and the 1.2740 level.
Hourly Chart
GBP/USD daily candle chart analysis
On the daily candle chart, the combination of the 50, 100 and 200-day simple moving averages held the rate up until the fundamental data revealed the future direction of the pair. The rate has now reached the 1.2800/1.2850 range.A move above 1.2850 is set to encounter resistance in the 1.2895 level. The 1.2895 level is the 2024 high level. It could once again act as resistance, before the 1.3000 mark is reached.
On the other hand, a bounce off the 1.2800/1.2850 zone might result in the pair once again looking for support in the 50, 100 and 200-day simple moving averages. Further below, note the 1.2500/1.2540 range, which has acted as support and resistance.
In addition, a major channel up pattern has been spotted. It has guided the pair since mid-April, when support was found in the 1.2300 mark.
Read More: Technical Analysis
Traders expect a decline
On Monday, the Dukascopy open positions were short as 70% of all open position volume was in short positions.
Meanwhile, pending orders in the 100-pip range around the rate were 65% to sell the pair.
On Thursday, traders were 75% short. In addition, 59% of pending orders were to sell the pair.
Dukascopy traders expected the pair to retrace back down.
Meanwhile, pending orders in the 100-pip range around the rate were 65% to sell the pair.
On Thursday, traders were 75% short. In addition, 59% of pending orders were to sell the pair.
Dukascopy traders expected the pair to retrace back down.