Looking at the GBP/USD price movement chart, the price seems to be showing a surge on Wednesday to test the 1.37000 level before presenting a plunge action on Thursday.
In contrast to the Federal Reserve (Fed) which implemented a tapering measure, England’s central bank appears to have disappointed market expectations for policy tightening in the past.
The Bank of England (BOE) appears to have even kept interest rates unchanged at 0.10% and indirectly continued to push the movement for the Pound to depreciate significantly towards the end of the week.
In addition, the pressure that is still felt on the uncertainty of Brexit at this time is also a factor that caused the value of the Pound to continue to weaken at a time when the USD is strengthening.
As such, it has totally pushed the GBP/USD price to make a plunge above 200 pips in Thursday’s trading to pass the earlier support level of the week at 1.36000.
The decline on display was seen to continue to sink until breaking the 1.35000 level before moving slowly and horizontally at the end of the session and continuing into the Asian session today (Friday).
The sustained bearish momentum will see the price move to test the support zone at the end of September which is around 1.34000 which is also the lowest level for 2021.
Assuming the USD manages to gain support on the publication of US NFP data in tonight’s New York session, it is not impossible for prices to plummet further and record new lows.
But if the price movement returns to be able to generate surge momentum, the SBR (support become resistance) zone of 1.36000 is expected to be retested before a more aggressive surge.
A clear aggressive surge will see the price test the SBR zone further at 1.37000 and in turn will give an early indication for the price to make a bullish trend change.
