GBP/USD drops as the USD is boosted by the USDX's rally. The pair is trapped within a minor range in the short term, a downside breakout could activate a strong sell-off. The pound loses ground even if the UK's Unemployment Rate dropped unexpectedly from 5.1% to 5.0%.
Surprisingly or not, the greenback continues its appreciation and ignores the US Existing Home Sales drop from 6.66M to 6.22M, way below 6.55M expected. Technically, the USD was still expected to resume its appreciation after the US Dollar Index has validated a bullish reversal.
So, USDX's further growth should force the USD to increase versus the other major currencies and not only against the GBP.
GBP/USD Reverses!
GBP/USD failed to develop an important growth after escaping from the minor Falling Wedge pattern. Its failure to register an upside breakout from the minor range signaled a selling pressure.
Now the price pressures the S1 (1.3778) static support. A valid breakdown from the minor range signals a drop below the major uptrend line. Dropping and stabilizing under the uptrend line indicates a bearish reversal ahead.
Forecast & Tips!
A valid downside breakout from the minor range may bring a bearish reversal as GBP/USD will be expected to drop below the uptrend line. The current sell-off indicates high selling pressure.
The aggressive breakdown through 1.38 and a new lower low, a bearish closure under 1.3778 is seen as a selling signal.
