The price chart of the GBP/USD pair has shown a continuous lower decline at the beginning of the market opening this week recording the latest 4 -week low.
This was due to the dominance of the US dollar which managed to depress the Pound until the end of the week despite the UK -focused economic data posting a good reading last week.
The UK employment data report for August was not so disappointing when examined on the figures released, while the UK inflation rate recorded an upward reading above expectations, much higher than the previous month’s reading.
As such, investors this week would like to see if the focus data succeeds in influencing the Bank of England’s (BOE) decision to tighten policy at this week’s meeting.
The past weekend has seen the price on the GBP/USD chart test the 1.38000 resistance in the SBR (support become resistance) zone before plunging lower until the end of the New York session ending last week’s trading.
The momentum continued earlier this week as the price continued its decline to the 1.37000 support zone continuing until the beginning of the European session today (Monday).
Can the zone support price increases again?
If it fails, the price will continue to decline lower towards the latest support zone at 1.36000.
The zone was also tested in July and September trading, but still managed to curb a more severe fall in prices.
If the price manages to rebound from the 1.37000 zone, the bulls will re -test the 1.38000 SBR zone.
For a bullish trend change signal on the GBP/USD chart, a higher rise past the 1.38000 zone will then head back to the 1.39000 resistance zone which was the previous focus.
The FOMC meeting and the BOE policy meeting this week are expected to have a big impact on both the US dollar and the Pound Sterling.
