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The GBP/USD pair dropped in the short term and now is almost to reach strong downside obstacles. As you already know, the rate dropped only because the Dollar Index has managed to rebound. It was traded at 1.1796 at the time of writing.
Surprisingly or not, the rate dropped even if the UK Retail Sales and the Gfk Consumer Confidence came in better than expected on Friday. On the other hand, the Existing Home Sales came in better than expected while CB Leading Index dropped more than expected.
Tomorrow, the UK Public Sector Net Borrowing is expected at 19.1B while the US Richmond Manufacturing Index could be reported at -9 points.
After failing to take out the 1.1904 - 1.1958 resistance zone, the price dropped and now it stands above the uptrend line and above the 1.1762 support levels. As long as it stays adobe these levels, it could develop a new bullish momentum.
The downtrend line represents a dynamic resistance. An upside breakout or a breakdown could bring new trading opportunities.
The GBP/USD pair could extend its sell-off if it makes a valid breakdown below 1.1762 and through the uptrend line. The first downside target is represented by 1.1645.
Staying above the uptrend line and making a valid breakout through the downtrend line and above 1.1958 brings new longs.
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