Watch out for the publication of the US Producer Price Index data on Wednesday at 13:30 GMT. The data will reveal inflation at the production level.
In addition, the US Retail Sales data is set to be published together with the PPI. The retail sales are set to signal whether or not the US consumers are continuing to purchase goods, despite the ongoing inflation.
GBP/USD short-term view
A continuation of the surge could encounter resistance in the 1.2400 and 1.2450 levels, prior to testing the weekly R3 simple pivot point at 1.2457. Note that the steeper a pair's surge occurs, the more likely it can get overextended and a resistance level can stop it.Meanwhile, a potential decline of the rate might look for support in the previously passed resistance levels at 1.2350, 1.2300 and 1.2288.
Hourly Chart
GBP/USD daily chart's review
On the daily candle chart, the pair trades between a resistance zone at 1.2305/1.2455 and support zone at 1.1740/1.1840.Daily chart
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Traders increase short exposure
Prior to the US PPI release, traders were 56% bearish, as 56% 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 50% to buy and sell the GBP/USD.
On Tuesday, the open positions were 53% short and pending orders were 52% to buy.
Prior to the US PPI release, traders were 56% bearish, as 56% 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 50% to buy and sell the GBP/USD.
On Tuesday, the open positions were 53% short and pending orders were 52% to buy.