Price increased very slow in the last days, signaling that the bulls could be exhausted again on the short term. Price is narrowing right now on the Daily chart, so we may have a significant move very soon, a breakout is inevitable. However, remains to see if this range represents an accumulation or a distribution movement. Price is still located in the buyers territory, but it could drop in the red area very soon if the USDX will increase further in the upcoming period.

GBP/USD decreased a little today as the USDX has managed to reach new highs. The dollar index has resumed the yesterday’s amazing rally and now stands above the 94.00 psychological level, a further increase will send the USD much higher versus all its rivals.

I’ve said in the last weeks that the USDX could climb towards the 97 level ahead of the FOCM, but is hard to believe that will approach this level unless the United States data will impress and will really confirm that the FED will hike the rate.

Only a disappointment regarding the December 13 meeting could send the USDX down again. GBP/USD erased the morning gains as the UK’s data have come in mixed today, the Public Sector Net Borrowing was reported at 7.5B, higher versus the 6.6B estimate and compared to the 4.4B in the former reading period. The CBI Industrial Order Expectations increased to 17 points, beating the 3 point estimate.

Price moves in range on the short term and tried to breakout above the 1.3268 static resistance, but failed for now. You can see that the price failed to close right on this level signaling that we may have a little drop.  It could retest the second warning line (wl2) again in the upcoming hours, a valid breakdown will signal a further drop at least till the 1.3046 static support (this represents the range’s support). A valid breakout above the 1.3268 will signal a further increase in the upcoming period.