On Tuesday, the US Consumer Price Index and Core Price Index are set to impact the markets through the US Dollar's value adjusting to US rate hike expectations. Namely, too high inflation is set to strengthen the USD, as the markets would expect higher rate hikes.
At 12:30 GMT on Wednesday, the UK Consumer Price Index is set to reveal how inflation has changed in the United Kingdom.
Also on Wednesday, at 12:30 GMT, the US Producer Price Index and Core Producer Price Index data will also impact the US Dollar.
On Thursday, the top event for the Pound will occur. The Bank of England is set to do another rate hike at 11:00 GMT. Most likely, the central bank will take into account the previous day's CPI release.
Additional data will be published on Thursday, as the US Retail Sales and Core Retail Sales are set to be released at 12:30 GMT.
GBP/USD short-term view
A move above 1.1700 would most likely encounter resistance in the 1.1715/1.1760 zone. Higher above, take into account the weekly R2 simple pivot point at 1.1790 and the 1.1800 mark. Afterwards, the 1.1850 and 1.1900 could slow down a surge, prior to the rate reaching the weekly R3 at 1.1932.On the other hand, a decline of the currency pair would look for support in 1.1650 and 1.1600, before reaching the weekly simple pivot point together with the 50, 100 and 200-hour simple moving averages. Further below, the 1.1500 level could act as support, before the 1.1450 level and the weekly S1 simple pivot point are reached.
Hourly Chart
GBP/USD daily chart's review
On the daily candle chart, the currency pair found support in the 2020 March low level at 1.1415.If the 1.1415 level gets passed, the pair will reach levels not seen for decades. Namely, the rate was below 1.1000 in early 1980s.
On the other hand, a recovery of the Pound against the US Dollar might encounter resistance in the 1.1760/1.1810 zone. Higher above, take into account the 50-day simple moving average near 1.1900.
Daily chart
Read More: Technical Analysis
Traders are long
This week, traders were bullish, as 70% 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 63% to buy the GBP/USD.
This week, traders were bullish, as 70% 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 63% to buy the GBP/USD.