The currency pair registered minor gains today and tries to stay above some very important support levels. Price increased a little as the USDX slipped lower after the last day’s rally. It remains to see what will really happen on the dollar index in the upcoming days because it moves sideways on the short term.

GBP/USD has come back down to test and retest some broken resistance levels, so only a bounce back will signal another upside movement. The rate has shown some exhaustion signs on the short term after the failure to make new highs. You should know that the perspective remains bullish on the Daily chart despite the last current drop.

The USDX dropped and now is pressuring the first warning line (wl1) of the minor ascending pitchfork. A failure to stay above this line will signal an overbought again and a potential drop towards the lower median line (LML) of the major blue ascending pitchfork. Another drop will force the USD to drop versus all its rivals, so only a further increase will help the greenback to dominate the currency market.

We’ll have a larger increase only if the rate will make a valid breakout above the median line (ml) of the black descending pitchfork and above the sliding line (sl) of the blue ascending pitchfork.

The rate is located above the 350% Fibonacci line of the former major descending pitchfork and above the 350% line of the ascending pitchfork. It could be attracted by the confluence formed between the mentioned dynamic support lines. A rejection or a false breakdown will signal another bullish momentum, but a valid breakdown will accelerate the sell-off, so you should stay away until we’ll have a fresh trading opportunity. Price could drop if will fail to make new highs in the upcoming period.