Like most other major currencies in the market, the Pound Sterling also showed a strengthening in its value earlier in the week against the US dollar.
However, the Pound’s rise is expected to be limited by pressure by Brexit uncertainties involving the Northern Ireland protocol which has yet to reach an agreement.
Meanwhile, the Governor of the central bank of England (BOE), Andrew Bailey continued to express his concern over the UK inflation projection after warning of the risk of an economic recession at a last policy meeting.
On the price chart of the GBP/USD pair, the price is seen to have displayed a bullish pattern at the beginning of the week and managed to break the resistance at the 1.22800 zone.
Provides an early indication for a bullish trend change when the price moves above the Moving Average 50 (MA50) support level on the 1 -hour time frame after last week’s decline hit its latest 2 -year low to around 1.21600.
The gains that continued until the beginning of the Asian session this morning (Tuesday) have reached a high of 1.23400, almost 200 pips increase from last week's lows.
If the rise continues, the SBR (support become resistance) zone of 1.2400 will be tested after several attempts to rise last week failed to pass the resistance.
For further higher upside expectations will target the resistance that was the focus previously around the 1.2600 zone.
Yet if the price starts to show a re -decline to continue the previous bearish trend, the lows reached last week will be challenged for the price to post the latest lows.
Further declines in prices are expected to lead to the latest support zone around 1.2100 or lower if the Pound continues to weaken while the US dollar remains dominant.
Investors' focus today will be on the UK employment data report which will be published in the European session while the US retail sales data will be in the New York session.
