The GBP/USD has posted little gains today, looks like that has found temporary support and now is struggling to rebound on the short term. Price continues to move sideways on the short term and most likely will resume this range in the coming days, remains to see what will happen on next Wednesday when the Federal Reserve will release the Federal Funds Rate, this event could bring high volatility and the rate could escape from the range movement.
The price has increased a little as the USD was punished by the USDX’s impressive drop, the index has fallen below the 101.50 level and looks very heavy after the failure to stabilize above the 102.00 psychological level. The USDX was somehow expected to drop after the failure to jump above the 102.25 previous high, has touched this obstacle, but wasn’t able to resume the short upside movement.
The USDX edges lower right now, signalling that the bears are in full control, a further drop will force the greenback to decrease further as well versus its major rivals.
The Cable has increased even if the United Kingdom data have disappointed, the Manufacturing Production dropped by 0.9% in January, even if the traders have expected to see only a 0.6% decrease, the indicator has fallen sharply after the 2.2% growth in December 2016, while the Goods Trade Balance has managed to increase a little, from -10.9B to -10.8B, despite that the economists have predicted a drop to -11.1B. The Construction Output decreased by 0.4%, more versus the 0.3% estimate, the indicator has decreased again after the 1.8% growth in the previous reporting period, the Industrial Production has come in line with expectations, the indicator has decreased by 0.4%.
The USD has failed to resume its bullish movement also because the United States economic data have come in mixed, the Non-Farm Employment Change has beaten the expectations, but has failed to lift the greenback, the indicator was reported at 235K, much higher compared to the 196K estimate. Unfortunately for the USD the Unemployment Rate has decreased from 4.8% to 4.7%, matching expectations, while the Average Hourly Earnings have increased only by 0.2%, less versus the 0.3% estimate. The Federal Budget Balance has disappointed as well because has fallen from 51.3B to -192.0B, much more compared to the -175.0B estimate.

GBPUSD-daily

You can see that the rate continues to move sideways on the short term, is still trapped between the 1.2795 level and the 1.2082 static support, we'll have a clear direction only when the rate will escape from this extended sideways movement. Is somehow expected to drop further after the drop below the 50% Fibonacci line (descending dotted line) and outside the minor ascending pitchfork's body. Should approach the lower median line (LML) of the major descending pitchfork in the coming weeks after the failure to reach and retest the median line (ML). Personally I hope that we'll have a clear direction after the FOMC meeting from March 15, right now will be better to stay away from this pair because we don't have any trading opportunity.

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