The GBP/USD is moving downside again as the USDX has managed to jump much higher in the last hours, the greenback is increasing because has received support from the United States economic data. The pair has found strong resistance and now is expected to drop significantly again if the USDX will have enough energy to stay higher and even to approach new highs.
Personally, I’m a little surprised by the USDX’s impressive jump, has increased remarkably after the morning drop below the 99.12, static support, we had a false breakout below this level in the yesterday’s session as well, which has signalled and oversold situation on the short term. I’ve said in the last weeks that I believe that USDX will move sideways in the coming weeks, so a bounce back right now is somehow expected on the short term.
A USDX’s increase will help the greenback to dominate the currency market again, but we still need a confirmation that the USD will start a larger increase.
The GBP/USD continues to move sideways on the short term, right now will be better to stay away from this pair because we don’t have any trading opportunity, the price is developing a symmetrical triangle right now, so we could have a clear direction in the coming weeks.
Price has edged lower in the last few hours as the USD was lifted by the positive US data, the CB Consumer Confidence surged from 116.1 to 125.6 in March, even if the traders have expected to see a drop to 113.9, while the Goods Trade Balance increased from -68.8B to -64.8B, beating the -66.6B forecast. Moreover the Prelim Wholesale Inventories rose by 0.4%, exceeding the 0.2% estimate, this wasn’t good from the USD, but the currency wasn’t impressed, the Richmond Manufacturing Index has jumped to 22 points in March, from 17 points in the previous reading period, has come in much better than the 16 point estimate.

GBPUSDdaily-1

You can see that the rate has found strong resistance right below the upper median line (UML) of the major descending pitchfork, could drop in the coming period also after the breakout above the first warning line (wl1) of the former ascending pitchfork and above the median line (ml) of the minor ascending pitchfork. Technically, should decrease after the failure to close right on the mentioned resistance levels, could drop to approach and reach the 50% Fibonacci line and the lower median line (lml) of the minor ascending pitchfork if the USDX will increase further in the coming days. Could drop also because has failed to reach the upside line (minor red downtrend line) of the potential symmetrical triangle.

GBPUSDh4-1

Price is going down after the breakdown from the minor ascending channel, however, personally I believe that the rate will rebound and will recover a little before will decrease further. Will extend the sell-off if the USDX will have enough energy to stabilize above the 99.55 broken static resistance (support has turned into resistance).

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