GBP/USD pressures the 1.37 psychological level, a valid breakout above it could activate further growth. USDX's short-term decline helped the Pound to resume its growth. GBP is strongly bullish due to better than expected inflation data reported by the UK.
Today, the US data could bring some action on GBP/USD but I don't believe that could change sentiment. The Unemployment Claims could drop from 965K to 930K in the previous week, while the Philly Fed Manufacturing Index could increase from 11.1 to 11.2. Moreover, the Building Permits and the Housing Starts will be released as well.
GBP/USD Upside Breakout?
As you can see on the H4 chart, GBP/USD edges higher ignoring the 1.3703 and the R1 (1.3707) static resistance. Closing and stabilizing above these obstacles suggest buying as the pair will be expected to approach and reach fresh new highs.
The price has developed a continuation pattern, a valid upside breakout will definitely bring more buyers into the game. Technically, it's expected to increase after escaping from the up channel's body and after jumping above the fifth warning line (wl5).
Trading Tips!
Closing and stabilizing above the R1 (1.3707) brings a long opportunity with an immediate target at the R2 (1.3839) level. The upside breakout above the fifth warning line (wl5) signals further growth towards the sixth warning line (wl6).
Now, only a major bearish engulfing or a false breakout above 1.3700 with huge separation could invalidate a larger growth.
