GBP/USD needs to overcome 1.3560 resistance to extend its rally

GBP/USD has managed to stage a decisive rebound after dropping below 1.3500 on Tuesday and continued to stretch higher early Wednesday. The pair is closing in on a key technical resistance that could cap its potential gains, according to FXStreet’s Eren Sengezer.

US private sector employment report and FOMC's minutes will be watched closely

“In the second half of the day, the ADP Employment Change data for December will be featured in the US economic docket. Markets expect the employment in the private sector to increase by 400,000. A better-than-expected print could lift US T-bond yields higher while helping the greenback regather its strength and vice versa.”

“Later in the session, the FOMC will release the minutes of its December policy meeting. The dollar should be able to outperform its rivals in case this publication reaffirms the Fed's hawkish policy outlook.”

“GBP/USD has failed to climb above the static resistance that seems to have formed at 1.3560 and buyers could move to the sidelines as long as this level holds. In case a four-hour candle closes above that hurdle, the next target on the upside could be seen at 1.3600 (psychological level).”

“Initial support is located at 1.3500 (psychological level, lower line of the regression channel) before 1.3470 (50-period SMA) and 1.3440 (static level).”