The US Dollar has been sharply surging in value due to the higher than expected US inflation data, which indicated that the inflation has not calmed down and the US Federal Reserve has to hike interest rates. Economic Calendar
On Tuesday, the financial markets are expected to react to the US Producer Price Index and Core Producers Price Index release at 12:30 GMT.
On Wednesday, the US Retail Sales and Core Retail Sales is bound to impact the USD value at 12:30 GMT.
The top event of the month is scheduled for Wednesday's 18:00 GMT. The US Federal Reserve will publish its Economic Projections and Statement. The central bank is expected to hike interest rates. The question remains among market participants whether a 0.50% or 0.75% hike occurs.
Note that after the official announcement a press conference is scheduled for 18:30 GMT.
On Thursday, the Bank of England is set to hike its interest rate at 11:00 GMT. The bank is expected to hike interest rates from 1.00% up to 1.25%.
In addition, note that the markets are set to react to the information about the future that will be included in the Monetary Policy Summary.
GBP/USD short-term review
If the Pound continues to decline against the US Dollar, the currency pair could look for support first in the 1.2150 level. Further below, note the weekly S2 simple pivot point at 1.2104 and the 1.2100 mark.However, a recovery of the currency exchange rate is set to encounter resistance in the 1.2200 mark and the weekly S1 simple pivot point at 1.2206. Higher above, note the 2020 July low level at 1.2260, which could turn into resistance.
Hourly Chart
GBP/USD daily chart's review
On the daily candle chart, the 50-day simple moving average could have been one of the catalysts of the recent decline, as it strengthened the resistance of the 1.2900 level.Meanwhile, note the 2022 May low level near 1.2156 and the 2020 low level at 1.2075.
Daily chart
Read More: Technical Analysis
Traders go long on GBP
On Monday, traders were 63% long, as 63% of trader open position volume on the Swiss Foreign Exchange was in long positions.
In the meantime, pending orders in a 100-base point range around the pair were 54% to sell the GBP/USD.
On Thursday, the open positions were 56% short and pending orders were 53% to buy. Traders have shifted from bearish to bullish.
On Monday, traders were 63% long, as 63% of trader open position volume on the Swiss Foreign Exchange was in long positions.
In the meantime, pending orders in a 100-base point range around the pair were 54% to sell the GBP/USD.
On Thursday, the open positions were 56% short and pending orders were 53% to buy. Traders have shifted from bearish to bullish.