GBP/USD Outlook: Cable Extended Rally to Seven-Month High, Helped by Downbeat US Data

Cable extended strong advance on Wednesday and hit new seven-month high at 1.3120.

The pair cleared several barriers en-route (100/200 WMA’s), after downbeat US data (ADP private employment report and non-manufacturing PMI) further hurt dollar and added to positive pound’s sentiment.

The pair is up around 0.8% for the day until now and also on track for the biggest one-day gains since 15 Oct, with daily close above broken Fibo barrier at 1.3045 (Fibo 76.4% of 1.3381/1.1958) needed to maintain strong bullish stance for extension towards 1.3179 (3 May high).

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Overbought daily stochastic and RSI attempting to break into overbought territory, signal that bulls may pause for consolidation.

Dips should be ideally contained by broken barrier at 1.3045, with deeper downticks expected to find footstep above 1.30 zone and keep bulls intact.

Res: 1.3120; 1.3179; 1.3200; 1.3257
Sup: 1.3045; 1.3012; 1.2982; 1.2963