Investors saw early signs of a trend change on the price chart of the GBP/USD currency pair when the price spike took place following last week’s meeting of the central bank of England (BOE) judged hawkish by the market.
But market analysts are warning of a possible price fall if the market returns to focus on policy tightening measures by the Federal Reserve (Fed) following signals delivered at the latest FOMC meeting.
After recording the biggest daily jump last Thursday, the price is seen soaring past the resistance of 1.37000.
However, the rise failed to continue instead the price fell back below the 1.37000 level and until the opening of the trading session earlier this week, the price moved below the Moving Average 50 (MA50) barrier level on the 1 -hour time frame for bearish signals.
BOE Governor Andrew Bailey’s speech will be the focus early Tuesday morning for the latest indicators for central bank monetary policy setting.
Flattened throughout the Asian session, the price displayed a rise at the beginning of the European session today to retest the 1.37000 zone as well as the MA50 barrier.
Failure to pass the following resistance will signal for a lower decline of the price with the expectation for the price to head back to the support zone at 1.36000.
The zone has supported the price to rise again on last week's decline which was also a support zone in last August's trading.
If the lower price drops beyond the support zone, the next decline is seen to be to the focus level of 1.35000.
However, if the price manages to maintain the bullish pattern after the initial signal of a trend change on last week's surge, the rise is expected to head to the level of 1.38000 to test the SBR (support become resistance) zone.
A higher rise will also test the resistance zone 1.39000 which failed to be broken before after being tested several times.
