GBP/USD dropped today and failed to resume the yesterday’s impressive rally. Price slipped lower as the USDX has reached new highs, has managed to climb above the 95.17 former high. USDX climbed as much as 95.19 level where has found temporary resistance again. We’ll see what will happen on the dollar index in the upcoming period because is located in the buyer’s territory even if has seemed a little exhausted.

The dollar index is still expected to climb towards the 97 level in the upcoming weeks, ahead of the next FOMC meeting, where the FED is expected to hike the Federal Funds Rate by 0.25%. The Cable wasn’t impressed by the UK’s data, the BRC Retail Sales Monitor dropped by 1.0% versus the 1.9% growth in the former reading period, while the Halifax HPI increased by 0.3% in October, more versus the 0.2% estimate.

Price has squeezed in the last hours, even if the US data have come in better than expected, the JOLTS Job Openings and the IBD/TIPP Economic Optimism have beaten the expectations. Remains to see what wil happen later, after the FED Chair’s speech, but personally, I don’t believe that will have any impact. The US Consumer Credit will be released and is expected to increase from 13.1B to 18.4B.

The pair has found strong support at the confluence between the outside sliding parallel line (SL) with the second warning line (wl2) of the ascending pitchfork. A retest of the wl2 will signal a further increase on the short term, but well see what will really happen because the USD could be forced to climb much higher versus its rivals if the USDX will approach the 96 level in the upcoming days. A breakdown below the wl2 will confirm a slow drop along the sliding line (SL). A USDX’s drop will send the rate towards the 250% Fibonacci line again. Resistance can be found at the 1.3268 level as well as the rate is narrowing on the short term.