The GBP/USD has plunged today and has managed to resume the yesterday’s minor bearish candle, is very heavy right now an looks unstoppable on the short term. Price has edged lower and has erased the Wednesday’s gains, technically is expected to drop further and to hit fresh new lows, he needs to ignore the minor support from the 1.2375 previous low if will want to resume the bearish momentum.
The pair continues to move sideways on the short term, but I hope that we’ll have a clear direction very soon because narrow movement can’t continue forever. The greenback has dragged the price down as the US dollar index has managed to reach new highs, the index has climbed above the 100.87 previous high and now is very closed to hit the 101.00 psychological level, could find temporary resistance at this level, but the next important upside target will be at the 101.22, a further increase is favored right now.
The greenback dominates the currency market again, a USDX’s further increase will force the dollar to climb much higher, the index has shown some exhaustion signs in the last days, but has finally managed to resume the upside movement.
The dollar edged higher even if the United States economic data have come in mixed, was boosted by the Unemployment Rate, which has decreased surprisingly, from 4.7% to 4.5% in the last month, even if the economists have expected the rate to remain steady at 4.7%, while the Average Hourly Earnings rose by 0.2% in March, matching expectations. Unfortunately the Non-Farm Employment Change has disappointed today, was reported at 98K, much below the 174K forecast and much below the 219K in the previous reporting period, the Final Wholesale Inventories have disappointed as well because has increased by 0.4%, more versus the 0.1% estimate.
The Pound has also fallen because the United Kingdom data have come worse today, punishing the currency, the Manufacturing Production has dropped by 0.1% in February, even if the specialists have expected to see a 0.3% growth, the indicator has remained in the negative territory and has punished the Pound, the Industrial Production has decreased by 0.7%, despite that the specialists have predicted a 0.2% increase. The Goods Trade Balance has dropped again, from -12.0B to -12.5B, the indicator has come much below the -10.9B estimate, while the Construction Output dropped by 1.7%, even if everyone has expected to see a 0.1% growth.

GBPUSDdaily

The price is going down as expected, I've said in my previous articles that we may have another leg lower if the rate will fail to break and stabilize above the median line (ML) of the major descending pitchfork. Technically should drop further because has failed also to close above the median line (ml) of the minor ascending pitchfork, the next downside target will be at the lower median line (lml) of the minor ascending pitchfork. Could take out the support from the lower median line (lml) after the failure to close right on the median line (ML) of the major descending pitchfork and could try to take out also the 1.2082 static support if the USDX will resume the upside movement.

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