GBP/USD dropped a little but the bias remains bullish in the short term after finding strong support and after failing to stabilize below the downtrend line. The Dollar Index plunged weakening the greenback as the US Advance GDP registered only 2.0% growth versus 2.6% expected.
The DXY is located deep in the seller's territory, so further drop is possible, this scenario could force the USD to depreciate versus the other major currencies. Today, the US Core PCE Price Index is expected to register a 0.2% growth versus 0.3% growth in the previous reporting period, the Chicago PMI could drop from 64.7 to 63.6, while the Revised UoM Consumer Sentiment could remain steady at 71.4 points.
Only better than expected US data could help the USD to recover. Some poor figures could push the greenback towards new lows.
GBP/USD Downside In Limited!
GBP/USD tested and retested the ascending pitchfork's median line (ML) and now is traded back above the major downtrend line. The weekly R1 (1.3820) stands as the first upside obstacle.
Making a valid breakout above it could announce an upside continuation. In the short term, we cannot exclude temporary declines, GBP/USD could come back to test and retest the downtrend line before jumping higher.
GBP/USD Forecast!
GBP/USD could extend its upwards movement as long as it stays above the downtrend line and above the median line (ML). Retesting these support levels could bring new long opportunities.
Also, a new higher high, making a valid breakout above the 1.3833 could signal an upside continuation.
