GBP/USD remains supported
This week GBP/USD tested the levels above the 2009-2013 trend line, touching $1.6440 on Monday. However, the cable has faced significant resistance in this area (38.2% Fibo, top of the bullish channel) and formed a bearish “shooting star”. The pair retraced to the $1.6345 support on positive US data late Monday, but on Tuesday has recovered to $1.6380.
The short-term bearish correction seems to be over for now; the bulls have regained control over the pair. We don’t see any reasons to sell the pair at least as long as it holds above $1.6340. Next support lies at $1.6260. Break above the $1.6440 resistance would open the way to $1.6760 (2011 high).
British Manufacturing PMI surprised the markets to the upside yesterday, coming at 58.4 (prior and forecast: 56.5). Today Britain is scheduled to release construction PMI at 9:30 GMT (prior: 59.3).
Chart. H4 GBP/USD