The pound remained gloomy at the start of this week’s market opening as investors awaited the outcome of the England central bank (BOE) meeting on Thursday in anticipation of an impending interest rate hike.
However, the tension of the war crisis between Russia and Ukraine is also a factor that puts pressure on the Pound due to the strain on the UK economy.
As such, it is difficult for the Pound to strengthen although it is highly likely for the BOE to raise interest rates at this week’s policy meeting.
On the other hand, what happened to the US dollar which managed to show a strengthening earlier in the week ahead of the FOMC meeting with the expectation that the Federal Reserve (Fed) will also raise interest rates.
The price chart of the GBP/USD pair saw the price still display a bearish pattern yesterday until it touched the latest lows in the support zone of 1.3000.
The bearish trend movement signal is also seen by investors when the price remains moving below the Moving Average 50 (MA50) barrier level on the 1 -hour time frame on the GBP/USD chart.
The lower decline is expected beyond the 1.3000 level to head to the latest support level around 1.2900 and continue to record the lowest level since November 2020.
As for the expectation of an upward movement, the initial resistance that will be tested by the price is seen at 1.31000 after the price also managed to pass the MA50 barrier to signal the initial change of trend.
The next price increase will test the resistance zone of 1.32000 which failed to be broken on last week's rise.