GBP/USD creeps higher within choppy price action, testing monthly trendline resistance. Plenty at hand for GBP traders to sink their teeth into this week. GBP/USD is trading sideways in so much that it can’t catch a break one way not the other, consolidating below hourly trend-line resistance. At the time of writing, GBP/USD is trading at 1.3109, up 0.23% and has chopped between a low of 1.3074 and a high of 1.3121. While there is plenty to mull over domestically for sterling, the UIS dollar has been the dominating factor or late. Positioning data ending the 11th August showed yet another rise in net euro longs which is now at +28% of open interest, a touch below the 30% highs seen in April 2018. This is a market that is clearly betting against the US dollar in the seventh consecutive week of gains in EUR positioning. Subsequent to the rise in both sterling and euro longs, the weighted USD positioning vs the G10 continued to fall, dropping to the bottom of a five-year range, en route to levels last seen in late 2012/early 2013. The pound was even able to squeeze shorts out despite the news last week that the UK economy is officially in recession for the first time in 11 years. In the week 5-11 August was the fierce trimming of GBP shorts, which dropped from 34% of open interest to 28%. UK economy 4X worse-off than the GFC economy However, the Gross Domestic Product for the second quarter, Q2, came at no surprise. The magnitude of the decline, however, was alarming. Pertaining to the lockdown restrictions, the UK gas faced a 20.4% quarter on quarter (QoQ) contraction vs the prior Q2, 2.2% contraction. This leaves the UK four times further into the red than its weakest point during the 2008 GFC. On the other hand, investors are more optimistic about the prospects of a stronger recovery. Economic recovery jumped to 8.7% month on month for June. For the week ahead, the next round of Brexit talks get underway, but investors may not be holding out for too much progress on that front. The optimistic tweets have fallen only second place to the sticking points as state aid. Brexit headlines will be accompanied by the next round of key economic data in July CPI, August PMIs and July Retail Sales. With positioning now into neutral territory for the first time since April, it is somewhat behind the pound’s spot stronger performance in mid-July. A period of consolidation could be on the cards at this juncture as the risks of Brexit uncertainty towards a no-deal is priced back in. Eyes on the FOMC Minutes Much will also depend on the sentiment surrounding the greenback. The Minutes of the Federal Open Market Committee will be a key event considering the rally in US yields this month. Minutes of the July FOMC meeting are released on Wednesday and traders will be watching out for guidance pertaining to the Average Inflation Targeting (AIT) or Yield Curve Control (YCC, both of which are dollar negative themes. GBP/USD levels The monthly chart is showing that the pair is challenging a strong monthly resistance level. From a swing trading perspective, the bears will be looking for the break of daily support structure and a restest of it prior to targetting a confluence of a 61.8% Fibonacci and prior resistance level as per the following chart: FX Street FX Street FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions. View All Post By FX Street FXStreet News share Read Next S&P 500 top movers: LB and GM among top gainers in choppy day FX Street 2 years GBP/USD creeps higher within choppy price action, testing monthly trendline resistance. Plenty at hand for GBP traders to sink their teeth into this week. GBP/USD is trading sideways in so much that it can't catch a break one way not the other, consolidating below hourly trend-line resistance. At the time of writing, GBP/USD is trading at 1.3109, up 0.23% and has chopped between a low of 1.3074 and a high of 1.3121. While there is plenty to mull over domestically for sterling, the UIS dollar has been the dominating factor or late. 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