GBP/USD dropped today and seems very heavy on the short term as the USDX rallied since the yesterday’s session. The USD has taken full control and drives the rate down, but remains to see what will happen when will hit a dynamic support level.

The pair is under significant selling pressure and could breakdown below a crucial dynamic support. Is very important to see what will really happen on the USDX in the upcoming period, a further increase will force the GBP/USD to make a valid breakdown. You should keep an eye on this pair because we may have a selling opportunity very soon if it will stabilize below the 1.3250 level.

The USD increases on the mixed United States economic data, the CB Consumer Confidence increase from 126.2 to 129.5 points, even if the traders have expected to see a drop towards the 123.9 points, while the Richmond Manufacturing Index was reported at 30 points, beating the 14 estimate  and the 12 points in the former reading period. Moreover, the S&P /CS Composite -20 HPI rose by 6.2%, beating the 6.0% estimate and the 5.8% growth in the former reading period, the Prelim Wholesale Inventories dropped by 0.4%, even if the traders have expected to see a 0.5% growth. Unfortunately, the Goods Trade Balance and the HPI have disappointed, but the USD wasn’t too affected.

The rate has plunged aggressively in the last minutes and slipped below the second warning line (wl2) of the ascending pitchfork. You can see that we had another false breakdown in the last weeks, so we should wait for a valid breakdown before we go short on this pair. We could have a selling opportunity if the rate will close below this line and if will come back to retest it. A buying opportunity will appear if we’ll  have another false breakdown and if will come back above the 1.3268 static resistance, but is less likely to happen because the rate goes down like a rock.