GBP/USD gave up the early gains on Thursday, leaving a classic bearish pin bar on the day chart, the pair didn’t move a lot on Friday due to holiday and the same thin volume trading is likely today as it is the Easter holiday across many countries.
As of this writing, cable is being traded near 1.6807. A hurdle can be seen around 1.6841, the high of the bearish pin bar. A break above the pin bar will again activate the bullish momentum, threatening the 1.6900 handle. The sentiment is extremely bullish due to repeated Higher High (HH) and Higher Lows (HL) in the near past.
On the downside, the pair is likely to find a support near 1.6689, the 23.6% fib level, ahead of 1.6635 where both the 55 Simple Moving Average (SMA) and channel support are currently sitting in. A daily closing below the long term channel support will push the pair into deeper correction phase, validating a dip towards the 1.6250 support area; this however appears to be a less likely scenario due to extremely positive fundamental outlook of the UK.
Chicago National Activity Index
Today, the Federal Reserve Bank of Chicago is scheduled to release the national activity index report. The report aims at analyzing the overall economic situation and inflation outlook. The index was seen standing at 0.14 point in February; higher reading in March will be seen as bullish for USD/JPY and vice versa.
US Leading Indicator
Today the Consumer Board of the US is scheduled to release the leading indicator for the previous month. The indicator attempts to measure the future economic activity such as the rate of unemployment, jobless claims, yield curve, new houses construction, average manufacturing workweek, stock prices etc. According to the median projection of different analysts, the reading of the indicator increased by 0.7% last month as compared to 0.5% in the month before, better than expected actual outcome will be seen as bearish for EUR/USD and vice versa.