The GBP/USD retraced back up to the 55 and 200-hour simple moving averages and the upper trend line of the channel down pattern. However, during the Asian session, the exchange rate broke the channel pattern and the resistance of the 55 and 200-hour SMAs.
On Wednesday morning, the pair confirmed the previous resistance of the channel pattern as support before starting to trade between the hourly simple moving averages.
Economic Calendar
On Wednesday, the US Federal Reserve is set to publish a FOMC Statement at 18:00 GMT and announce the Federal Funds Rate. This event is bound to set the tone for the whole global monetary policy. The GBP/USD has moved from 18.9 to 36.4 base points since November 5, 2020 on the announcement.
At 12:00 GMT on Thursday, the Bank of England is bound to make a rate statement and reveal its monetary policy statement. A move from 23.6 to 73.1 pips has occurred due to this event since August 2020.
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
In regards to the near term future, the rate could break the resistance of the 100-hour SMA and the 1.3920 mark. In this case scenario the rate would first test the 1.3960 level and afterwards the 1.4000 mark.On the other hand, the pair might pass the support of the 55 and 200-hour SMAs near 1.3890 and test the support of the broken pattern's resistance line.
Hourly Chart
On the daily candle chart, the rate appears to be trading sideways between the 1.3800 and 1.4000 levels.
Meanwhile, the 55-day SMA had almost caught up with the rate. Previously, the SMA was capable of pushing the GBP/USD up by just approaching it by approximately 50 base points. On Tuesday, the SMA had approached the rate as close as 39 pips.
Daily chart
Read More: Technical Analysis
Sentiment slightly changes
Since last week's Wednesday, 55% of trader open position volume on the Swiss Foreign Exchange was in short positions.
This Wednesday, the sentiment became 56% short.
Meanwhile, in the 100-pip range around the rate the pending orders were 68% to sell the GBP/USD pair.
Since last week's Wednesday, 55% of trader open position volume on the Swiss Foreign Exchange was in short positions.
This Wednesday, the sentiment became 56% short.
Meanwhile, in the 100-pip range around the rate the pending orders were 68% to sell the GBP/USD pair.