It was quite thrilling for the Pound to trade yesterday with daily movements on the GBP / USD currency pair chart reaching up to 500 pips!
Significant price movements occurred in the European session yesterday when it was reported that the Brexit negotiations between the European Union (EU) and the UK failed to reach an agreement when the UK was said to be unwilling to follow the agreement.
As a result, the price on the GBP / USD chart plummeted to 130 pips. However, as the market expects the Pound to continue to weaken, the price jumps up to 160 pips higher reaching the high of 1.29780.
The surge was backed by reports of positive re-negotiations that negotiators are optimistic the agreement will be reached.
However, investors remain wary of the risk of uncertainty as the Pound recovers from the level reached.
The price decline was also driven by the strengthening of the US dollar following another focus issue, namely the discussion of economic stimulus packages in the United States (US).
Continued trading in today's Asian session saw the price show a decline and move below the Moving Average 50 (MA50) barrier level within the 1 hour time frame of the price movement.
With the Pound expected to remain risky in addition to the strengthening US dollar, prices will be pressed lower to the weekly support zone level around 1.28000.
A lower decline will lead to the RBS zone (resistance become support) before reaching the lower support zone at 1.26700.
However, beware if the price rises again, the resistance level at 1.3000 will be the target of the next rising destination.
