The price movement on the chart of the GBP/USD currency pair earlier this week still gave a bearish signal following the decline exhibited.
Opening early trading in the Asian session yesterday, the price slipped lower than last week's closing level around 1.32350 entering the support zone 1.32000-1.31700.
Yet a resurgence of prices out of the zone was seen in the European session around 70 pips which was then re -pressed in the New York session to move slowly above the 1.32000 level.
The strengthening of the US dollar since last weekend has put pressure on the Pound even though the British currency has previously managed to be strong driven by an interest rate hike by the Bank of England (BOE) at a policy meeting last week.
Investors also saw the prospect of a strengthening US dollar after the hawkish outcome of last week’s FOMC meeting with the announcement to accelerate bond -buying reduction measures.
The US dollar strengthened again earlier this week with risky market sentiment amid concerns that Omicron’s contagion increased the attraction of the safe-haven currency.
The slow price movement on Tuesday’s trading was seen trying to make a rise from the 1.32000 level.
Prices that are still moving below the Moving Average 50 (MA50) barrier level on the 1 -hour time frame remain giving an indication for bearish price movement.
But is the support zone 1.32000-1.31700 successfully broken?
If the price returns to decline, the support zone will be tested again before the lower decline will record the latest lows again for 2021.
On the other hand if the price manages to make a rise, the initial resistance level at 1.33000 will be tested first after passing the MA50 barrier for the initial signal of a bullish trend change.
A higher rise will test the resistance zones of 1.33600 and 1.34000 on the bullish pattern of the price that managed to continue.
