Examining the GBP/USD price movement chart, the price appears to be back on the rise in Monday’s trading session after completing an inverted head and shoulders pattern on the 1 -hour time frame which gives an early signal for a trend change.
The jump from the 5 -week low has also resulted in an increase of more than 150 pips and approached the resistance trendline as well as the SBR (support become resistance) zone of 1.36000.
The upside momentum also shows that the price has passed the Moving Average barrier level (MA50) to give an early indication that the price is able to soar more violently.
It seems that the USD is still failing to regain strength despite the publication of the US NFP data with a positive reading last week.
While the issuance of the US producer price index (PPI) as well as once again the Federal Reserve (Fed) speech at the New York session tonight will be a reference for investors to assess the reaction of the USD movement.
The Pound, meanwhile, maintained a strengthening pace after taking space despite being disappointed by a statement from the Bank of England (BOE) on policy tightening measures.
A clearer bullish trend signal will be seen if the price movement passes the resistance trendline and tests the SBR 1.36000 zone before the price is expected to climb to test the SBR 1.37000 zone.
An aggressive uptrend is likely to drive the price on the GBP/USD chart to the resistance zone or even a 35-day high at around 1.38000-1.38300.
However, if the resistance trendline manages to curb the higher price surge, it will see the price make the latest LH (lower high) to continue declining.
A significant decline will push the price movement back to the RBS (resistance become support) zone of 1.35000 or will continue to maintain the fall to the support zone of 1.34000.
