GBP/USD rallied aggressively as the USDX has plunged and has resumed the corrective phase as expected. I’ve told you in the last weeks that the USDX may drop further and could ruin the USD. GBP/USD was almost to reach the 1.3300 psychological level and also a dynamic resistance line.

A USDX’s further drop will force the pair to resume the upside movement. Price has confirmed the current upside movement after the impressive breakout above some very strong and crucial resistance levels.

Maybe the rate could drop a little on the short term to retest some broken levels before will resume the upside movement. It remains to see if this will be a temporary increase or the rate will turn to the downside again.

The USDX slipped below the inside sliding line (sl) and now is pressuring the median line (ml) of the ascending pitchfork. I’ve told you in the previous week that the rate should reach the sliding line (sl) after the failure to retest the 50% line.

If you’ll read my previous analysis on the USDX you’ll notice that I’ve talked about a further drop if the rate will make a valid breakdown below the inside sliding line (sl). Personally, I believe that a valid breakdown below the sliding line (sl) will announce a  valid breakdown below the median line (ml) as well. So, a further drop will force the dollar to lose more ground versus its rivals.

GBP/USD has managed to jump above the 50% Fibonacci level and above the median line (ml) of the descending pitchfork. Price increased after the 61.8% line retest and after it has failed to approach and retest the lower median line (lml). It is almost to reach the 50% Fibonacci line where it could find a resistance again. Maybe it will come back to retest the broken 50% retracement level before will make a valid breakout above the 50% line. Resistance can be found at the upper median line (uml) and at the 38.2% retracement level as well.