The Cable is showing considerable strength against both the Dollar and the Euro. The GBP/USD continues its impressive rally from our near-term downtrend line and is approaching our 2nd tier uptrend line.

The relative strength of the Pound comes on the heels of an encouraging improvement in Britain's Manufacturing PMI data. The rally taking place in the S&P futures is only helping considering the positive correlation between U. S. equities and the GBP/USD.

However, it will be interesting to see if the Cable can maintain its upward momentum if U. S. equities head south. The two economies are so intertwined that the correlation should ultimately take control of the trend.

That being said, while the momentum for the Cable is to the upside, our 2nd tier uptrend line and psychological 1.45 area should prove to be worthy opponents.

Additionally, the GBP/USD has logged more volume on its recent descent compared to the present incline. Therefore, investors haven't fully bought into a stronger Pound. If the GBP/USD can brave through our 1.4492 resistance, then we could see a nice poop towards 1.4549 before investors hesitate to catapult the currency pair well beyond
1.45.

Fundamentally, we find resistance of 1.4398 with additional resistances hanging at 1.4437, 1.4467, 1.4492 and 1.4549. The 1.45 area will serve as a psychological barrier with 1.40 acting as a highly psychological cushion.

To the downside, we see supports of 1.4362, 1.4326, 1.4283, and 1.4240. The GBP/USD is currently exchanging at 1.4395.

Copyright 2009 FastBrokers, Latest Forex News and Analysis for Forex, Bullion and Commodity Traders.   

Disclaimer: For information purposes only. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained. There is a substantial risk of loss in trading futures and foreign exchange.