The GBP/USD started the week with a gap up and a surge. By the middle of the day's European trading hours, the currency exchange rate was testing the combined resistance of a weekly R1 simple pivot point at 1.3431 and the psychological resistance of the 1.3450 mark.
In the meantime, news about the UK-EU trade talks continues to impact the markets. Namely, the gap was attributed to trade talk news published during the weekend.
Economic Calendar
The week for UK events is set to start on Wednesday at 07:00 GMT. At that time the UK Consumer Price Index is set to be published. This event has caused moves from 9.7 to 22.2 pips on the GBP/USD since July.
On the same day, at 09:30 GMT the UK Manufacturing and Services PMIs are set to be published. This event has caused moves from 13.0 to 21.0 pips.
In addition, on Wednesday, the US Retail Sales and US Core Retail Sales could cause a move on the chart at 13:30 GMT. The rate has moved 10.3 to 25.7 pips on the announcement.
Moreover, on that day the US Flash Manufacturing and Services Purchasing Managers Indices or PMIs are set to be published at 14:45 GMT. The GBP/USD has moved from 7.8 to 35.5 pips on this publication.
The day would end with the top event of the whole calendar. The US Federal Reserve is set to publish their Federal Funds Rate and FOMC Statement at 19:00 GMT. However, this is one of the three times when the FOMC Economic Projections are published. During the publication of the projections the GBP/USD has moved 68.5 pips in June and 36.4 in September.
Despite the Fed having the top event, in theory, there have been larger GBP/USD moves due to another event. Namely, the Bank of England's publication of the Official Bank Rate and Asset Purchase Facility information has caused moves from 40.0 to 73.1 pips since May. The publication will occur on Thursday at 12:00 GMT.
Also on Thursday, at 13:30 GMT the US Unemployment Claims could create a move of 13.0 to 25.8 pips.
The week for GBP/USD traders will end at 13:30 GMT on Friday with the release of the UK Retail Sales at 07:00 GMT. Expect a move from 6.4 to 16.0 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
During Monday morning hours, the GBP/USD exchange rate jumped to the resistance level—the weekly R1 at 1.3431.If the predetermined resistance level holds, it is likely that the currency pair could reverse south and target the psychological level at 1.3200 within the following trading session.
Meanwhile, note that the exchange rate could gain support from the 55-, 100– and 200-hour SMAs, as well the weekly PP in the 1.3283/1.3365 range. Thus, some upside potential could prevail in the market, and the rate could re-test the 1.3520 mark.
Hourly Chart
On the daily candle chart, the rate found support for the most recent surge in the 55-day simple moving average at the 1.3135 level. In the meantime, the rate had the additional support of the 100-day SMA near the 1.3100 level.
In addition, note that the 61.80% Fibonacci retracement level at 1.3178, which kept the rate down in October and November, did not provide support.
Daily chart
Read More: Technical Analysis
Short sentiment returns
On Monday, 67% of trader open position volume on the Swiss Foreign Exchange was in short positions. The sentiment was 63% short on Friday.
Meanwhile, in the 100-pip range around the rate the pending orders were 55% to sell the GBP/USD pair.
Previously, the orders were 64% to buy.
On Monday, 67% of trader open position volume on the Swiss Foreign Exchange was in short positions. The sentiment was 63% short on Friday.
Meanwhile, in the 100-pip range around the rate the pending orders were 55% to sell the GBP/USD pair.
Previously, the orders were 64% to buy.