The GBP/USD plunges aggressively and is almost to hit another downside target. Is trading in the red and looks poised to drop much deeper even if the United Kingdom data have come in mixed today. The Cable has lost significant ground versus all its rivals an not only against the dollar.

GBP/USD has dropped below an important dynamic support, but the breakdown needs confirmation before we can say that we’ll have a larger drop.

The greenback has taken full control again on the short term as the USDX has edged higher and is very close to hit the 93.81 horizontal resistance again. The dollar index has increased sharply on the short term, but remains to see if will have enough energy to make a valid breakout above the 93.81 static resistance, because another false breakout or a rejection will force the index to drop towards the 92.49 static support.

The Cable wasn’t inspired by the United Kingdom data, the CPI increased by 3.0% in the previous month, matching expectations, while the Core CPI surged by 2.7%, has come in line with expectations. The RPI increased only by 3.9%, less versus the 4.0% estimate, while the PPI Input rose by 0.4%, less compared to the 1.2% estimate. Moreover, the HPI and the PPI Output surged by 0.2%, matching expectations.

The GBP/USD dropped and resumed the yesterday’s bearish candle. Price is almost to reach the outside sliding line (SL) of the major descending pitchfork where he could find support again. I’ve said in the last reports that the perspective remains bullish as long as is trading above the 250% Fibonacci line (ascending dotted line). You can see that we have a false breakdown in the last weeks, but the price failed to take out the 1.3046 horizontal support.

We’ll see what will happen with the USDX in the upcoming days because a further increase will force the GBP/USD to drop further. A drop below the sliding line (SL) will signal a breakdown below the 1.3046 static support as well.