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GBP/USD plunges at the time of writing as the Dollar Index has managed to rebound. As you already know from my analysis, when DXY grows, the USD appreciates versus its rivals. The currency pair climbed as high as 1.3642 today where it has found resistance.
Surprisingly or not, the pound drops despite the fact that the UK Retail Sales rose by 1.9% versus 1.1% growth expected. On the other hand, the US data came in mixed. The Existing Home Sales indicator was reported at 6.50M versus 6.10M expected, while the CB Leading Index dropped by 0.3%.
Technically, the pair moves sideways between 1.3504 and 1.3627 levels. As you can see, the rate registered only false breakouts through 1.3627 static resistance and now it has turned to the downside.
In the short term, the pair could extend its sideways movement. Only a valid breakout from the current range could bring great trading opportunities and a clear direction.
A temporary drop followed by a valid breakout through the 1.3627 could announce an upside continuation.
After its false breakouts, GBP/USD could come back down towards the former downtrend line and towards the range's support of 1.304. A valid breakdown through this level could bring new selling opportunities.
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