Pound Sterling (GBP) rose against the US Dollar (USD) yesterday, for the sixth day in a row, increasing the GBP/USD to 1.6683 as Fed chair Janet Yellen once again surprised the financial markets with her remarks about the stimulus reduction.
Technical Analysis
The pair is being traded near 1.6649 at 10:00 GMT in London. Resistance can be seen around 1.6685, 23.6% fib level, ahead of the channel resistance that is currently standing near 1.6737. A daily close above the upper trendline will push the cable into stronger upside trend, exposing the double top resistance area as demonstrated in the following chart.
On the downside, the pair is likely to find support around 1.6602, 38.2% fib level, ahead of 1.6532 which is a confluence of the channel support and 50% fib level. The pair has been in a strong bullish trend since last 10 months amid rapid recovery in the UK.
UK Construction Data
On Wednesday, Chartered Institute of Purchasing & Supply and Markit Economics is scheduled to release the Construction Purchasing Managers Index (PMI) for the previous month. According to median projection of different economists, the construction activity in the UK rose last month to 63.0 points as compared to 62.6 points in the month before, better than expected actual figure will be seen as bullish for GBP/USD and vice versa.
US Employment Change
Tomorrow Automatic Data Processing Inc. (ADP) is going to release the employment change figure for the US. According to forecast, companies created 195K new jobs in March as compared to 139K in the month before. Tapering in the stimulus is linked to favorable outcomes from the labor market that is the reason why the report will be monitored very closely by the Federal Open Market Committee (FOMC) policy makers.
Conclusion
Cable is poised for an upside breakout through the daily rising wedge pattern which will accelerate the ongoing bullish momentum in the price.
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