Thats it! The price on the GBP/USD currency pair chart fell to its latest low since May 2020.
What happen?
The impact of the continued decline in Wednesday's trading was driven by the strengthening of the US dollar which put pressure on the Pound following the US inflation data published in the New York session.
The US annual inflation reading for April was slightly lower than March, but figures that exceeded expectations were still seen hovering in the 40 -year high zone. This supports investor confidence in the strengthening of the US dollar for longer -term movements.
Thus, it also put additional pressure on the Pound after the central bank of England (BOE) warned of the risk of a recession in Britain at a policy meeting last week.
There was an initial rise of the price around 120 pips at the beginning of the New York session yesterday from the support level of 1.22800 touching the resistance level of 1.24000.
But the price made a decline again following the strengthening of the US dollar towards the end of the session showing a decline of around 160 pips to the latest low of 1.22400.
Although the slow movement in trading continued in the Asian session this morning (Thursday), it still showed a bearish pattern with bearish signals of the price moving below the Moving Average 50 (MA50) barrier level on the 1 -hour time frame on the GBP/USD chart.
The decline that will be extended is expected to lead to the latest target level at around 1.2100, which is the price support zone in May 2020.
Analysts maintain expectations for the price trend to continue to decline, but remain vigilant in case a change in price direction could occur over the weekend.
If the price makes a rebound, the resistance at 1.2400 will continue to be the focus of the price to test.
Breaking the resistance will push the price higher towards the 1.2600 zone which was the focus of last week's trading.
