Judging by the price chart of the GBP/USD pair, the price movement is seen to continue to surge aggressively after touching the Moving Average 50 (MA50) barrier level in the 1 -hour time frame.
The surge also reached the RBS (resistance become support) zone of 1.38000 and has produced an increase of over 100 pips as well as recording the latest high for 4 weeks.
Entering the Asian session today (Wednesday), the price seems to continue its excellent performance with an uptrend pattern after making a slight decline at the end of Tuesday’s trading session.
The hawkish statement made by the Governor of the Bank of England (BOE) recently remained supportive of the Pound to extend its strengthening against the USD.
In addition, investors are also expected to look forward to the report of consumer price index data used to measure the UK inflation rate to be published in the European session shortly.
A publication with an encouraging reading will indirectly provide a more convincing indication and shadow to investors for the Pound to continue to display dominance.
If the bullish pattern is successfully continued, it is not impossible for the price movement to be able to reach the resistance zone at 1.39000 and form the latest HH (higher high) pattern.
A more ‘violent’ rise will see prices test the resistance zone which remains the focus at 1.40000 following the zone often curbing price spikes in the past.
On the other hand, if the price movement returns to decline, the RBS 1.37000 zone is expected to be retested before the price is likely to continue to decline lower.
A significant decline will see the price movement hit the RBS zone further at 1.36000 and in turn will give an early signal for the price to change the trend again.
