The GBP/USD dropped today and tries to resume the minor corrective phase. Remains to see what will happen because is still located above an important dynamic support (resistance turned into support). We’ll see if the support area will hold in the upcoming days because the USDX maintains a bullish perspective on the short term despite the yesterday’s retreat.
The USDX decreased a little after a false breakout above a dynamic resistance and after the failure to approach and reach the 93.81 horizontal resistance. The dollar index changed little today and tries to stay much above the 93.00 psychological level. I’ve said in the last days that the USDX could develop an Inverse Head and Shoulders pattern if will come back to approach the 92.49 horizontal support failing to drop below this level. The chart pattern will be confirmed only after a valid breakout above the 93.81 static resistance.
The Cable has lost ground on the mixed United Kingdom’s data, the Gfk Consumer Confidence was reported at -9 points, much better versus the -11 point estimate, the Revised Business Investment rose by 0.5%, beating the 0.0% estimate and the 0.0% growth in the former reading period, while the Net Lending to Individuals increased from 4.8B to 5.6B, beating the 5.0B estimate. The M4 Money Supply increased by 0.9%, exceeding the 0.2% estimate.
Unfortunately for the Pound, the Current Account dropped further from -22.3B to -23.2B, even if the traders have expected to see an increase to -15.8B, while the Final GDP rose by 0.3%, matching expectations. The Index of Services and the Mortgage Approvals have come in worse that expected.
Price is pressuring the upside line of the ascending channel, a rejection from here will send the price much higher again. However, a valid breakdown below it will signal a drop below the warning line (wl1) as well.
I’ve said in the previous article that the pair maintains a bullish perspective on the Daily chart despite the minor decrease. Only a failure to climb and to close above the 1.3656 previous high will signal an exhaustion and a potential drop in the upcoming period.