The re -depreciation factor of the US dollar in the market has prompted a price spike on the chart of the GBP/USD currency pair.
After a bearish pattern was displayed since the beginning of the week, prices were seen rebounding in the New York session yesterday as the US dollar's pressure on the Pound began to subside.
Previously the US dollar continued to push prices lower even as investors expected a rise in prices after positive signals from the central bank of England towards measures to tighten their monetary policy.
However, the Pound’s strengthening last week was only temporary before the US dollar’s strengthening over the weekend following market reactions to the encouraging US NFP jobs report has dragged prices down lower.
In the New York trading session yesterday, the price that dropped almost to the support zone 1.38000 has jumped back around 80 pips towards the SBR zone (support become resistance) 1.39000.
Investors are wary of the Pound’s likely turbulent movement today (Thursday) ahead of the release of UK Gross Domestic Product (GDP) focus data for the second quarter at the start of the European session shortly.
The continued depreciation of the US dollar is likely to push the price higher breaking the resistance at the SBR zone of 1.39000.
The continued rise will re -target the resistance zone at 1.40000 which failed to be reached during the series of price increases at the end of last July.
However, if the US regains the momentum to dominate the Pound again, the price will drop to test the 1.38000 support zone again.
The continued decline could reach back to the previous focus level around 1.37000 and also the support zone of 1.36000.
