GBP/USD extended upside movement on Tuesday ahead of some major economic releases. The pair is expected to break the channel resistance before launching an assault on the double top resistance area.
As of this writing, the pair is being traded near 1.6627. Resistance may be seen at 1.6640 that is the upper trendline channel ahead of 1.6686 i.e. the 23.6% fib level. A daily closing above the channel resistance will result in the renewed buying pressure, threatening the double top resistance area.
On the downside, the pair is likely to find support near the 1.6600 handle which is the psychological level as well as 38.2% fib level before the 55 Daily Moving Average (DMA). Since the rising wedge formation on the daily chart has become too squeezed, so a bearish breakout might also be a possibility however it is a less likely scenario.
Britain’s national statistics department will release the manufacturing production report for the month of February. According to average projection of different economists, the production declined to 3.1% in February compared with 3.3% in the same duration of the year before. Better than expected actual outcome will be seen as bullish for GBP/USD and vice versa.
NIESR Gross Domestic Product (GDP) report of Britain is also schedule for release today. The report will give an estimate of GDP figure for the past three months. The previous figure was seen standing at 0.8%, higher GDP will be seen as very bullish for GBP/USD and vice versa.
The pair is likely to break the upper trendline to print fresh multi-month highs above the double top resistance area. Buying on the upside breakout could be a good strategy to trade cable.