The European session on Wednesday yesterday focused on the release of UK inflation data where the annual reading for January once again recorded the highest rate in 30 years surpassing the previous month’s reading.
Thus, the Pound has managed to continue to strengthen its value and managed to absorb the pressure by the strengthening of the US dollar previously.
Meanwhile, the US dollar failed to react positively to strengthen in the New York session yesterday despite several factors seen to support the strengthening of the US dollar in the market.
U.S. retail sales data published rose during the New York session and minutes of the FOMC meeting also showed Federal Reserve (Fed) policymakers were ready to raise interest rates.
Russia-Ukraine developments are expected to return tense when there are reports that Ukraine has launched mortar attacks and bombs on the border have lent support to the US dollar during this morning’s Asian session as a safe-haven currency.
On the price chart of the GBP/USD pair, the price has displayed a bullish pattern yesterday after testing the support level of 1.35000 last Tuesday.
The bulls have passed the resistance at 1.35700 with the high reached at the end of the New York session being around 1.36000.
The price movement above the Moving Average 50 (MA50) support level on the 1 -hour time frame on the GBP/USD chart since yesterday also signals for a reversal of the bullish trend.
A higher rise is expected for the price to head to the resistance zone at 1.36500 which is still a price barrier for trading in the next few weeks.
However, investors will expect the re -strengthening of the US dollar in risky market sentiment will push prices to decline again.
The initial decline of the price again tests the support level of MA50 which will signal for further movement of the price.
For a continued decline, the support level of 1.35000 which is in the RBS (resistance become support) zone will once again be tested to give a clearer signal for a change in the bearish trend.
Further decline in the price is seen to lead to the focus level at 1.34000 and also the support zone 1.33600.
