GBP/USD making mini double top pattern

GBP/USD is trading in the red according to the H1 chart and it has developed a potential Double Top chart pattern which could signal a potential drop in the short term. The pair continued to increase in yesterday's session as the USDX stayed lower.

The USD could take full control if the USDX increases again. The US dollar decreased a little versus the other major currencies amid disappointing the NFP report and the unemployment data. However, the US currency could remain strong during the COVID-19 pandemic.

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GBP/USD failed to reach the R1 (1.2425) level in the last two attempts signaling that the pair is exhausted and overbought. It failed to approach the upper median line (UML) of the ascending pitchfork. It fell below the median line (ML). A valid breakdown below the 1.2369 low will validate a minor drop.

I've drawn a minor orange descending pitchfork hoping that I'll catch a potential drop, so if the price remains below the upper median line (uml), it could be attracted by the median line (ml) and by the lower median line (LML) of the ascending pitchfork.

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A valid breakdown below the 1.2369, another low, will confirm a drop towards the median line (ml) of the minor orange descending pitchfork and towards the weekly Pivot Point (1.2314). We'll have a broader drop if the USDX edges higher and if GBP/USD ignores the support represented by the PP, the median line (ml), the 50% retracement level and by the lower median line (LML).

GBP/USD will resume the upside movement only if it fails to make a valid breakdown and if it jumps and stabilizes above the upper median line (uml).

The material has been provided by InstaForex Company - www.instaforex.com