GBP/USD Approaching Crucial Levels September 11, 2017

By Olimpiu Tuns September 11, 2017, 11:05 am • Posted in Forex

The GBP/USD moves higher and approaches fresh new highs as the dollar remains sluggish on the short term. Has changed little today also because is located near an important resistance level. The dollar wasn’t impressed by the USDX’s minor increase.

The dollar index has managed to increase after the last week’s massive drop, is premature to talk about a rebound on the USDX because is located under strong resistance levels. USDX is still under massive selling pressure despite the today’s increase.

The cable continues to increase also versus the Euro and versus the Japanese Yen, not only versus the greenback. Technically, the GBP/USD is expected to climb much higher in the upcoming days and should reach and retest some critical resistance levels.

I’ve added the USDX’s chart to show you what’s happening with the USD on the short term. You can see that has dropped sharply in the last week, but failed to reach and retest the upper median line (uml) of the minor descending pitchfork.

The price is driven by the technical factors today as the economic calendar is empty. Tomorrow we may have some movement on the GBP/USD as the United Kingdom is to release the inflation data.

The GBP/USD is trading in the green after the retest of the warning line (wl1). Will climb much higher if stays above the mentioned dynamic resistance (support turned into resistance). The next upside target will be at the outside sliding line (SL) and at the upside line of the ascending channel. A sharp increase will hit the confluence area formed at the intersection between the sliding parallel line with the upside line of the ascending channel.

Technically a breakout above the mentioned resistance levels is favored after the retest of the upper median line (UML) of the major descending pitchfork. Resistance can be found at the 1.3266 previous high as well, a failure to reach it will signal an overbought and will send the rate down again.

A failure to reach also the SL and the upside line of the ascending channel will bring us a great selling opportunity.