The GBP/USD has changed little today and continues to move sideways, is narrowing and I hope that we’ll have a clear direction very soon because the rate should start a broader movement. The pair is still trapped inside of an extended sideways movement, is located at the half of this range, could drop in the coming period if the US dollar index will have enough directional energy to climb much higher. The USDX has increased as much as 101.75 today, but has failed to reach the 101.78 previous high, however a further increase will force the dollar to appreciate versus its rivals.
The United Kingdom data have come in mixed and have failed to boost the Cable, the Second Estimate GDP rose by 0.7% in the fourth quarter and has exceeded the 0.6% estimate, has increased more versus the 0,6% growth since the third quarter. Moreover the Prelim Business Investment has decreased by 1.0%, even if the economists had expected a 0.0% increase, the economic indicator has decreased again after 3 increasing months, while the Index of Services rose by 0.8%, matching expectations, but the figures have failed to keep the Pound higher.
The price continues to trade at the half of the extended sideways between the 1.2089 and the 1.2798 levels, the narrow movement has formed a minor triangle, we had a false breakout from this minor pattern today. I hope that a valid breakout from this pattern will bring life on this pair, however, the rate could still come to test and retest the lower median line (lml) of the minor ascending pitchfork before will try to increase, the perspective remains somehow bullish on the lower timeframes as the behavior has changed when the rate has started to make higher lows. Maybe will be better to stay away from this pair till we’ll have a fresh trading signal, we could have a buying opportunity if the price will come down to test the confluence between the 50% Fibonacci line (descending dotted line) and the lower median line (lml) of the ascending pitchfork, or a selling opportunity if the rate will fall below this confluence area.