The pound sterling managed to show a strengthening in Thursday's trade against the US dollar after moving weakly since the beginning of the week.
The strengthening of the Pound is supported by a proposal for tax implementation in the UK by Prime Minister Boris Johnson which is seen to support economic recovery while boosting the Pound currency.
Even UK policymakers are also reported to support the implementation of the tax even though it will arouse the displeasure of the people of the UK. Adding to the controversy, PM Johnson is like breaking his promise as he once stated not to implement taxes in his manifesto before.
On the price chart of the GBP/USD pair, the price has exhibited over 100 pips daily gains yesterday reaching a high of 1.38600 in the New York session.
Following the gloomy momentum of the US dollar over the weekend, the price rebounded above the 1.3800 level and passed the Moving Average 50 (MA50) barrier on the 1 -hour time frame of the price movement to give a bullish signal.
The rally is seen to test once again the 1.39000 resistance zone that was tested last weekend which is still preventing the price from going higher.
The rise beyond the zone will target the high of 1.40000 which was also the focus of previous trades as well as push the price to record the latest 3 -month high.
However if the price makes a decline again, the level of 1.38000 will be tested which will be the latest support level of the price.
A lower drop below that level and even passing the MA50 support will give an early signal of a change in the bearish trend of the price.
The decline will test the lowest level reached this week on Wednesday around 1.37300 before reaching the support zone of 1.37000.
Investors will also focus on the UK economic data that will be published at the beginning of the European session soon which will affect the movement of the Pound.
