The bullish pattern on the chart of the GBP/USD currency pair has been revamped after the price started giving signals for a lower decline.
The re -strengthening of the US dollar in the market is seen to have reduced the profits earned at the beginning of the week with yesterday’s daily decline recorded around 120 pips!
In addition to the strengthening US dollar, the Pound also received pressure following a warning by UK Health Minister Sajid Javid who stated that the number of Covid-19 infection cases would increase to 100,000 cases a day after this.
Thus, after yesterday's price increase initially reached a high of around 1.39000, investors have seen the price plunge back to the level of 1.37700.
The price moved back below the Moving Average 50 (MA50) barrier level on the 1 -hour time frame on the GBP/USD chart to signal the beginning of the bearish trend again.
The price movement slowed in the Asian session this morning around the 1.38000 level, however a lower price decline would be expected in the European session for the price to test the weekly low reached last Friday around 1.37400.
Next, the support zone at 1.37000 will be the focus for continued bearish expectations.
The zone has managed to re -support the price increase after being tested in March and April trading last year.
If the price manages to make a rebound, the resistance zone at 1.39000 will be re -tested after yesterday’s rise failed to pass it.
A higher rise will be expected heading back to the SBR (support become resistance) zone at 1.40000.
