Today, the GBP/USD pair has rallied and seems to be ready to hit new highs as the US Dollar Index remains under strong downside pressure. A deeper drop in the DXY is expected to affect the greenback, which could post significant losses against its rivals.

Only US economic indicators could save the US dollar from falling. US Pending Home Sales are forecast to decline by 0.9% after dropping by 4.6% drop in the previous reporting period. The Richmond Fed's manufacturing index could come in at -10 points, much worse than in the previous reporting period.

Tomorrow, the euro area is set to release statistics on Private Sector Loans and M3 Money Supply, while the US will report data on Unemployment Claims.

GBP/USD Downtrend Over!

Following a failed attempt to reach the 1.1991 level, the GBP/USD pair has edged higher. Now it is heading for the upside sliding line (sl1) and the weekly pivot point of 1.2090. These levels are seen as resistance.

The previous high of 1.2112 also acts as strong resistance. So I recommend focusing on the 1.2106 - 1.2133 zone.

GBP/USD Outlook!

A breakout above 1.2133 confirms that the downside movement is over and buyers have a chance of taking the lead. This signals an upside reversal, which in turn can be seen as a buying opportunity.

False breakouts above the resistance levels are likely to bring the price back down.