To the surprise of many investors when the Pound Sterling managed to close last week’s trade brilliantly after exhibiting an unexpected surge.
The situation confuses market players who expect the Pound to continue to move weakly due to a number of stressful factors.
The spread of the virus in the UK remains a concern amid focus on preparations for the economic reopening scheduled for July 19.
If you look at the price movement on the chart of the GBP/USD currency pair, the price last Friday jumped back 150 pips to close the trade around the level of 1.39000.
The rise above the 1.38000 level as well as the Moving Average 50 (MA50) barrier on the 1 -hour time frame of the price movement has also started to signal for a bullish trend change.
The indicator will be even stronger if the price increase continues earlier this week and passes the SBR (support become resistance) zone of 1.39000-1.39200.
Still, the Pound needs stronger factors to support its rise without expecting a mere depreciation of the US dollar.
If the increase manages to penetrate the zone, the next increase target will be refocused on the SBR 1.40000 zone which was tested at the end of June.
On the other hand, if the upside situation is only due to profit-taking activities and the price will resume the decline this week, the weekly support level around 1.37400 will return to the price.
The lower decline could reach the level of 1.37000 which is the support zone supporting the price increase in March and April trading last year.
