FX.co ★ GBP/USD rebound could be over anytime soon

GBP/USD has found temporary support and resumed its upward movement in the short term. The Dollar Index continues to increase, so the USD could start rising versus its rivals.

The pair has advanced a little after its massive drop, but technically this was somehow expected to be only a temporary throwback. The UK CPI increased only by 2.0% below 2.3% expected and versus 2.5% registered in June, while the Core CPI increased by 1.8% failing to reach the 2.0% estimate.

The US data has come in mixed today. Still, today's major event is the FOMC Meeting Minutes. A hawkish report could help the USD to resume its growth.

GBP/USD Found Strong Resistance

GBP/USD has increased to retest the ascending pitchfork's median line (ML) and now is trading in the red again. My yesterday's forecast suggested that the breakdown through the channel's downside line signaled a further drop.

GBP/USD could drop deeper towards 1.37 or even lower as long as it stays below the median line (ML) and under the black downsloping line.

Forecast

Making a valid breakout below the 1.3731 and through the 61.8% retracement level signals more declines. A new lower low closing under 1.3742 could trigger a larger downside movement even towards the 1.36 if the DXY resumes its growth.