The GBP/USD had reached below the 1.2900 mark, but found support at 1.2880. On Wednesday morning, the rate was fluctuating between these two levels, as the UK S&P 500 Purchasing Managers Indices were released. The better than expected data caused a surge of the Pound against the US Dollar above the 1.2900 level. However, resistance was encountered in the 50-hour simple moving average.
Meanwhile, traders continued to hold onto their short positions, but had set up close by buy orders. It is assumed that the orders are close orders of short positions and buy to open long positions orders.
Economic Calendar
On Thursday, the US Advance GDP might impact the markets via an adjustment of the value of the US Dollar. Better GDP means that the US does not need to cut rates, which would keep the Dollar higher. Bad GDP data indicates that the Fed can cut, which would reduce the value of the USD.
On Friday, at 12:30 GMT, the top event of the week will take place. The US Core PCE Price Index will move the markets. The Core Personal Consumption Expenditure Index is expected to impact the markets by revealing whether inflation has increased or continues to decline. In general, the markets expect a reading of a monthly price increase of 0.2%. If the number is higher, the Dollar should surge. A reading below +0.2% is set to cause a decline of the USD.
GBP/USD hourly chart analysis
A move above the 50-hour SMA could result in the rate facing the 100-hour SMA. Higher above, the combined resistance of the 200-hour SMA, the weekly simple pivot point and the 1.2950 level might stop a potential recovery.In the more likely case of a resumption of the prior broader decline, the 1.2900 and 1.2880 levels might slow down the rate, before it reaches the support of the 1.2845/1.2855 range and the weekly S1 simple pivot point at 1.2859.
Hourly Chart
GBP/USD daily candle chart analysis
Prior analysis: "On the daily candle chart, the pair has hit the upper trend line of the pattern that has guided the GBP/USD up since mid-April. Moreover, the pair apparently has booked a new 2024 high level.A bounce off from the trend line could result in the rate looking for support in 1.2900 and the prior 2024 high at 1.2899, before the rate declines to the 1.2800/1.2850 zone."
Since July 22, the rate was finding support in 1.2900, but there was resistance at 1.2950 that was keeping the pair from resuming the prior surge.
Read More: Technical Analysis
Traders set up buy orders
On Monday, the Dukascopy open positions were short as 67% of all open position volume was in short positions.
Meanwhile, pending orders in the 100-pip range around the rate were 61% to sell the pair.
On Wednesday, traders had doubled down on their shorts, as 60% were short.
However, trader pending orders were 62% to buy instead of sell. It appears that traders could soon take profits.
Meanwhile, pending orders in the 100-pip range around the rate were 61% to sell the pair.
On Wednesday, traders had doubled down on their shorts, as 60% were short.
However, trader pending orders were 62% to buy instead of sell. It appears that traders could soon take profits.