After the release of manufacturing and services data (PMI) of the United States (US) in the New York session at the end of last week which shrank below the contraction level, the US dollar closed trading for the last session with a significant depreciation in addition to the expectation of profit taking activities by the investors.
In addition, the decline in the US government's 10-year bond yield to a level of around 2.73% also added pressure to the trading of the currency king in the market since last week.
Investors' focus will now be on the policy setting by the Federal Reserve (Fed) which is expected to increase by 75 basis points for the second time in a row at the FOMC meeting early Thursday morning.
Meanwhile, the Pound is seen to be moving gloomy throughout the past week with the release of UK and US manufacturing and services data last Friday making price movements uncertain.
In the New York session last Friday, the Pound managed to take advantage of the space to jump following the decline of the US dollar to close last week's trading at the latest 2-week high.
In addition to the UK election developments being monitored, investors will also be alert for the Pound's movements this week ahead of the Bank of England's (BOE) policy meeting next week.
Monitoring the price movement of the GBP/USD currency pair at the end of last week's trading session, the price was initially seen to shrink around 80 pips in the European session before a rebound was seen in the New York session with an increase of around 140 pips to the height of 1.20600.
The price however slipped back below the 1.2000 level at the close of the last trading session of the week.
Continuing on the opening Asian session trading earlier this week, the price is seen hovering below the 1.20000 barrier and testing the Moving Average 50 (MA50) support level on the 1-hour time frame on the GBP/USD chart.
If the MA50 level manages to support the price to bounce back and pass the 1.2000 level, the price is likely to be able to overcome the high level reached last week with the target for the next increase being at 1.21000.
Further, the target for the bullish movement that continues the price is at the 1.22000 zone, for the price record the latest 4-week high level.
On the other hand, if the price shows a bearish pattern this week, the initial support level at 1.19400 is expected to be tested first before giving a clearer bearish trend change signal.
Next, the price is expected to go to the 1.18800 level on the continued decline before the main price target is the 1.18000 support zone for the latest 2-week low.
