The UK economic growth forecast for the year is seen as failing to support the strengthening of the Pound Sterling in early trading of the week.
Investor concerns are still overshadowed by the Brexit uncertainty that is back in the spotlight again.
Even so, the European Union (EU) and the UK have reportedly been negotiating on issues involving Northern Ireland. Brussels has offered a new deal to London, to resolve disputes and build better trade relations.
In the meantime, the Pound is seen to continue to bear the brunt and the increase in trading value is likely to be limited.
On the chart of the GBP/USD pair, the rise initially following the weak movement of the US dollar has tested the resistance level of 1.39200 before declining again in the European session.
The decline is supported by the support level of Moving Average 50 (MA50) on the 1 hour movement of the price which is also around 1.38700.
If the price falls lower, the RBS (resistance become support) zone 1.38300-1.38000 will be tested by the price which is seen as a support level for the price to rise again.
If the price continues to decline to continue the bearish trend, the support zone at 1.37000 will be the price focus destination.
However, if the Pound manages to strengthen again, the upside is likely to pass yesterday’s high to head back to the previous resistance level of 1.40000.
