GBP/USD rallies and resumes the bullish movement as the USD is punished by the USDX further drop. Is strongly bullish on the short term and approaches other upside targets. The dollar continues to drop versus its major rivals as the USDX plunged today again and resumed the impressive bearish momentum. USDX dropped as much as 91.02 level failing to reach the 91.00 psychological level, is premature to talk about a rebound on the dollar index because is under immense selling pressure. Technically, the USDX could rebound and to start a larger upside movement only if will stay above the 91.02 level. The dollar index failed to reach and retest a dynamic support, that’s why I’ve said that we ay have a throwback.
The Cable received support from the United Kingdom economy earlier, the Manufacturing Production rose by 0.5% in July, beating the 0.3% estimate and the 0.0% growth in the former reading period, while the Goods Trade Balance increased from -12.7b to -11.6B, beating the -11.9B estimate. The Industrial Production rose by 0.2%, matching expectations, while the Consumer Inflation Expectations increased by 2.8%, the same like in the former reading period.
The Construction Output disappointed a little because have dropped by 0.9%, more versus the 0.2% estimate and compared to the 0.1% drop in the former reporting period.
Price resumes the bullish momentum after the breakout above the 1.3046 static resistance and is almost to reach the first warning line (wl1) of the minor ascending pitchfork. Could also be attracted by the outside sliding line (SL) of the major descending pitchfork.
Resistance can be found at the 1.3266 previous high, a valid breakout above this obstacle will confirm a further increase towards the next major horizontal resistance from the 1.3527 level. Could find temporary resistance at the upper median line (uml) of the minor red descending pitchfork, a rejection from this level will signal a drop towards the 1.2798 and the median line (ml).
Technically, the current rebound is natural after the false breakdown below the median line (ml) of the minor red descending pitchfork.