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GBPUSD : Currently in Overbought Zone

GBPUSD today reversed the downtrend to uptrend breaking the resistance trend line of the descending triangle on the 4 hour chart. The pair was earlier consolidating within a descending triangle which gives a bearish signal. However the pair surged breaking the previous resistance 1.6916. The demand for currency increased after the strong U.K. services sector PMI data which added speculation that the Bank of England might raise interest rates at the beginning of next year ahead of other central banks. According to the data the U.K. services PMI rose to 4 month high of 58.7 last month from a reading of 57.6 in March which economists were expecting to remain unchanged.

On the daily chart, the pair seems like following an upwards sloping channel trend. So the pair should find resistance from the rising resistance trend line and fall. Any breakout from the support trend line will confirm the bearish trend. On the stochastic oscillator the pair is trading in overbought zone.