Price drops even if the USDX has plunged aggressively after the US data was released, is trading in the red, but could turn to the upside again if the index will drop much deeper in the upcoming days.

The perspective is bullish on the short term and a valid breakout above the upper median line (UML) will bring more buyers.

GBP/USD squeezed a little in the last hours as the USD plunged after the massive USDX’s sell-off, could only retest a support level before will climb much higher. Continues to move upside within an ascending pitchfork channel, so further increase is expected.

The Cable has dropped versus the USD even if the UK’s Retail Sales have increased by 0.6%, beating the 0.4% estimate, the indicator increased significantly after the 1.1% drop in the previous reading period.

The greenback plunged  despite the mixed US data, the Unemployment Claims decreased from 248K to 233K in the previous reading period, have come much below the 245K estimate, while the Philly Fed Manufacturing Index decreased from 27.6 points to 19.5 points, much below the 23.4 estimate. Moreover the CB Leading Index increased by 0.6%, beating the 0.4% estimate and the 0.2% growth in the former reading period.

Price slipped below the upper median line (UML) of the major descending pitchfork, but most likely this will  be a false breakdown. A retest of the UML will attract more buyers on the short term, we’ll have a perfect buying opportunity if the rate will retest the warning line (wl1) of the ascending pitchfork.

The next upside target is at the upside line of the ascending channel and higher at the lower median line (lml) of the ascending pitchfork, we have a major resistance also at the 1.3527 static resistance.

A larger drop will come only if we’ll see a valid breakdown below the warning line (wl1) of the ascending pitchfork, this scenario will take shape only if the USDX will start an impressive rally or if the fundamental factors will send the price lower.