Why is GBP/USD expected to reach new highs?

GBP/USD rallied in the last hours and now is trading at 1.3654 signaling further growth if the USDX reaches new lows. The pair has decreased a little to retest the broken upside obstacles before resuming its upwards movement.

The greenback continues to depreciate even if the US ISM Manufacturing PMI, ISM Manufacturing Prices, and the Wards Total Vehicle Sales have reported better than expected data in yesterday's session.

Today, the ADP Non-Farm Employment Change and the FOMC Meeting Minutes could shake the markets. Also, BOE Gov Andrew Bailey Speaks. Besides, US Final Services PMI and Factory Orders could bring more volatility on GBP/USD.

GBP/USD Towards New Highs!

Technically, GBP/USD is bullish as long it stays above 1.3539 and beyond the up channel's resistance. The price has tested the fourth warning line (wl4) and the 1.3539 static support and now is expected to approach the fifth warning line (wl5).

We may have a good long opportunity if the rate consolidates above the PP (1.3590) level or if it makes a new higher high, to close above the 1.3703 level.

Forecast!

The temporary drop helps us to catch a new upside momentum. The Pivot Point (1.3590) retest could represent a buying signal. The R1 (1.3752) could be used as a first upside target.

Also, the fifth warning line (wl5) could attract the price in the short term if the US Dollar Index continues to drop.