European currencies are expected to trade riskier this week amid pressure by expectations of a strengthening US dollar after US treasury yields soared last week.
However, the resumption of U.S. bond yields earlier in the week is expected to slow down while the movement of the U.S. dollar and investors await a speech by Federal Reserve (Fed) Chairman Jerome Powell at tonight’s New York session.
The pound sterling is expected to be at risk even as the UK continues to distribute vaccines. This is because UK Prime Minister Boris Johnson plans to extend movement restrictions in the UK until October.
The situation which is seen to slow the economic recovery will add to the pressure on Pound Sterling trading.
This week is also loaded with UK economic data that will affect the movement of the Pound such as employment data reports and retail sales data.
If one observes the price movement on the chart of the GBP/USD currency pair, the price still failed to break the resistance level of 1.4000 after being tested again last week.
The weekend saw the price drop back to the support level of 1.38300 in the price focus zone. Movement below the Moving Average 50 (MA50) barrier on the 1 -hour time frame also signals for the price to continue the downtrend.
Starting trading earlier this week, the price is still hovering slowly in the 1.38300 zone with the expectation of a lower decline to occur.
The support zone at 1.37000 will return to be the price focus destination for the continued decline.
If the Pound manages to trade strong again in the market, the price may make a rise again but the resistance level of 1.40000 will be tested again.
A higher rise for a bullish trend change will target previous focus levels such as 1.41000 and resistance levels 1.42000.
