After the price movement of the GBP/USD pair failed to break the weekly highs last week, the price continued to make a bearish pattern until it passed the resistance level of 1.38000.
The plunge around 100 pips from the 4 -week high gave a bearish signal and continued to move below the Moving Average 50 (MA50) barrier level in the 1 -hour timeframe.
At the opening of trading in the Asian session today (Monday), the price has plunged by creating a ‘gap’ before closing again with a surge to test the SBR (support become resistance) zone of 1.38000.
The Pound finally gave the USD a chance to pioneer its dominance which has indirectly pushed the price on the GBP/USD chart to remain bearish.
The release of positive UK PMI economic data in the European session (Friday) also seemed unable to drive the price movement to continue to soar higher after being weighed down by the strengthening USD.
The strengthening is seen to have been supported by the latest report from Federal Reserve (Fed) Chairman Jerome Powell who said it was ready to implement a reduction in bond purchases.
After breaking the resistance level of 1.38000, investors may shift their focus to the RBS (resistance become support) zone of 1.37000 to be reached if the price continues to remain with the downtrend movement pattern.
The weekly high of 1.38300 is expected to return to the next stop if the price movement rises again before a clearer probability of seeing the price continue to soar.
The initial rise is likely to head back to the main resistance zone at the SBR (support become resistance) zone of 1.39000 and at the same time will eliminate the bearish signals that want to be displayed.
