GBP/USD false breakout?
Price dropped significantly in the last hours and ignored a major support line, a valid breakdown below this level will open the door fro more declines in the upcoming period. GBP/USD has turned to the downside as the USDX has managed to rebound and to recover after the impressive drop.
USDX is pressuring the 95.00 psychological level, but is premature to say that we’ll have a large rebound in the upcoming days because is still located below a very strong dynamic resistance (support turned into resistance).
The Cable drops aggressively even if the United Kingdom Retail Sales increased by 0.6% in the previous month, beating the 0.4% estimate. The indicator increased significantly after the 1.1% drop in the former reading period.
Continues to move within an ascending channel, but has failed once again to reach the upside line of the chart pattern, signaling an exhaustion. Has failed to stabilize above the 150% Fibonacci line (ascending dotted line) and above the upper median line (UML) of the major descending pitchfork. A valid drop below the UML will bring us a perfect selling opportunity.
I’ve said in the previous analysis that we should wait to see if we’ll have a valid breakout above the UML, a USDX upside increase will invalidate the breakout, the sellers could take full control and could drive the price towards the downside line of the ascending channel.
A broader decrease will be confirmed after a valid breakdown below the first warning line (wl1) of the minor ascending pitchfork.
The perspective remains bullish as long as the rate stays above the warning line (wl1) of the minor ascending pitchfork, we’ll have a buying opportunity only if the rate will climb and will stabilize above the UML again.
USD/CAD could bounce from the lows
USD/CAD posted humble gains, but could climb much higher if the USDX will have enough energy to resume the minor rebound. Price is still under massive selling pressure, could drop anytime again and could resume the downward movement if the dollar index will drop again.
USD/CAD changed little today as the buyers are fighting hard to take the lead on the short term, but I want to remind you that the perspective is bearish, we don’t have any reversal sign right now. The bias is bearish as long as trading within the minor descending pitchfork’s body.
Could still reach the 1.2460 major static low as long as stays below the median line (ml) of the descending pitchfork.
AUD/USD erased the yesterday’s gains
AUD/USD reached new highs in the morning, has increased as much as 0.7988 level, the sellers have taken the lead and have send the rate much below the 0.7908 yesterday’s low.
Price dropped aggressively ahead the US data, the current retreat was expected after the impressive rally, but this could be only temporary because the perspective remains bullish.
By Olimpiu Tuns
The post Daily Market Report GBP/USD another leg lower? July 20, 2017 appeared first on mexgroupblog.