GBP/USD holding 1.40 ahead of US ADP on Wednesday

• The US ADP Employment change is slated on Wednesday at 12:15 GMT.
• UK PMI Construction is scheduled on Wednesday at 8:30 GMT.

The GBP/USD is trading at around 1.4005 up 0.27% on Tuesday as the European session came to an end. Earlier in the day, the UK manufacturing Purchasing Managers’ Index (PMI) came in for March at 55.1, up from 55.0 in February. Analysts were expecting 54.7.

Looking ahead on Wednesday the UK PMI Construction index for March is expected to decelerate to 50.8 from 51.4 in February. The American macroeconomic camendar will see  the ADP Employment Change which is the forerunner of the Non-Farm Payroll on Friday, along with the ISM non-manufacturing PMI.

It is worth noting “The net long position of 34.2k contracts, as of the March 27, is the largest in three years. The gross longs increased by nearly 50% since the start of March (from 61.4k to 90.2k contracts).” says in a note, Marc Chandler from Brown Brother Harriman.  

GBP/USD weekly chart

The GBP/USD has formed a double top and is capped by the 200-period simple moving average on the weekly chart which is now at 1.4258. The main trend is up, although the bulls will need to overcome the 1.42/43 resistance zone. 

GBP/USD daily chart 

The GBP/USD is supported by the 50-period simple moving average at 1.3991 and it is currently trading in a three-day range between 1.40 and 1.41. The RSI is currently at 54.28 and the daily MACD is slowly losing momentum.

GBP/USD 4-hour chart

The GBP/USD is currently supported by the 100-period simple moving average on the 4-hour chart since March, 29. Support is seen at 1.4010 the low made on March, 30. If the level is broken then the next significant support is seen at 1.3889 swing low. To the upside, resistance is seen at 1.42 swing high and 1.4245 cyclical high. The RSI is currently at 49.46.