Cable is trading higher, forming a very nice, clear impulsive sequence which will extend much higher in days to come. The reason is sharp rise over the past few weeks, which seems to be a wave (iii), part of a larger five wave rally. This wave however, is now at resistance, so traders should be aware of a three wave pull-back in wave (iv).
We expect lower levels on dollar index after sharp fall in the last two weeks which definitely has a shape of a third wave price action. Notice that in this week price extended through the falling trend-line which is an important evidence that temporary lows are in, most likely bottom of a blue wave (iii). Recovery from 78.62 is slow and is sideways, so it should be corrective wave (iv) that will send market beneath 78.60 after a completed pull-back. However, test of 79.50 area is still possible before downtrend resumes.