European currencies were seen finding room for slight gains at the market opening earlier this week following mixed trading by the US dollar after weak momentum on the release of the US NFP jobs data report last weekend.
Thus, it can be observed that the price movement on the chart of the GBP/USD currency pair managed to display a daily increase of around 140 pips yesterday despite still hovering in the 2 -year low zone.
Investor confidence in the Pound however remained gloomy after a warning of an economic recession in Britain by the central bank of England (BOE) at a policy meeting last week.
Examining the price movement on the GBP/USD chart yesterday, the price made a decline once again testing the 1.22800 support zone in the Asian session yesterday, after last Friday's decline to that zone for a record low price in the 2 -year trading period.
However, the price rebound occurred in the European session continuing at the beginning of the New York market session to the level of 1.24000, which is the latest SBR (support become resistance) zone on the price chart.
However, the price failed to signal for a change in the bullish trend after the price re -dropped from the SBR zone below the Moving Average 50 (MA50) barrier level in the 1 -hour time frame before the price slowed around 1.23400 towards the end of the New York session.
Continuing on Tuesday's trading, prices are seen still looking for a clearer direction with investors wary ahead of the US inflation data report to be published on Wednesday.
If a price increase occurs, the SBR zone of 1.24000 will be tested once to be broken to higher levels.
Giving an early signal for a trend change, the continued upside is seen to be able to cross the 1.25000 level before heading to the resistance zone at around 1.26000 which was the focus of last week’s trading.
But if the bearish trend continues again this week, the 1.22800 support zone will be broken and investors will need to be prepared for a more severe price fall.
The target for the next decline is towards the zone around 1.21000 which was once the price support zone in May 2020 trading.
In addition to focusing on US inflation data on Wednesday, investors will also focus on the release of a UK economic growth data report for the first quarter on Thursday that will affect the movement of the Pound.
