The US dollar traded flat in the middle of the week while investors are now waiting for a speech by Federal Reserve (Fed) Chairman Jerome Powell before Congress in the New York session soon.
The US dollar was seen slightly stronger in the Asian session this morning (Wednesday) continuing the initial strengthening triggered in the previous session likely investors began to focus on the tightening of Fed monetary policy with the expectation of several more interest rate hikes continuing until the year -end meeting.
As for the Pound, there is expected to be a slight increase in the reading of the UK annual inflation data for May which will be published at the beginning of the European session shortly with an expected increase to 9.1% from the previous month's 9.0%.
Meanwhile, Bank Of England’s (BOE) Huw Pill Chief Economist and Executive Director of Monetary Analysis stated that they are prepared to act based on the effects of ongoing price pressures.
The price movement on the GBP/USD currency pair chart saw a bullish pattern since the early opening of the week but still at a slow momentum.
Rising prices until Tuesday’s trading yesterday saw the price test the resistance zone at 1.23000 but failed to sustain higher gains before slipping back below that zone in New York session trading.
Trading continued in the Asian session this morning (Wednesday), the decline was seen to have broken the barrier level of the Moving Average 50 (MA50) which could trigger early expectations for a trend change pattern that will occur on the GBP/USD price chart.
If the price manages to continue today's decline, the price will decline below the 1.22000 zone and further will expect further decline to the level around 1.21000 before reaching back to the support zone 1.20000 to display bearish movement.
On the other hand, if the price manages to continue rising, it is seen that the price will try to break through the resistance at 1.23000 before continuing to rise higher towards the resistance zone of 1.24000.
The zone was reached last week following a price spike with the strengthening of the Pound which received a positive reaction to the results of the meeting of the central bank of England (BOE).
The release of UK inflation data at the start of the European session is soon expected to drive further price movements.
