New York session trading last weekend (Friday) saw the US dollar fail to maintain its strengthening momentum driven by expectations of a profit -taking situation by investors making the US dollar weaken again.
The depreciation of the US dollar also followed the release of US manufacturing PMI data from the ISM survey which recorded a lower figure than forecast.
According to Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, the weak June PMI data survey signals that the manufacturing sector is indirectly impacting GDP ahead of next summer.
In addition, business expectations, inflows of new orders, backlog of work and declining input purchases also marked the risk of a recession in the industry.
While developments in Europe, investors are still wary of lingering concerns over the Brexit issue over the actions of the United Kingdom (UK) which wants to change the Northern Ireland protocol, but is opposed by the European Union (EU).
As such, the Pound remained traded lower until the end of last week hitting the latest low against the US dollar.
The price movement on the chart of the GBP/USD currency pair last weekend saw the price decline around 200 pips past the support level at 1.21000.
The significant decline has reached the expected level at 1.2000 which acts as support for the price when the price has rebounded after testing the level.
The rebounding price has shown a rise of more than 100 pips reaching back to the level of 1.21000 which is now a resistance for price trading which continues to the Asian market opening session this week.
The price, however, is still not able to break the Moving Average 50 (MA50) barrier level on the 1 -hour time frame on the GBP/USD chart, indicating that the price is still moving in a bearish trend, but investors are wary of a significant price surge.
If the price continues to decline further, it is seen that the 1.20000 price support zone will be tested again before the price that continues to decline on the next bearish trend will head to the level of 1.19400 which was once touched by the price in mid -June trading.
On the other hand, if there is a rebound, the resistance in the 1.21000 zone will be the focus of the price to be tested before the price that continues to rise higher and passes the MA50 barrier will give an indication of a bullish movement again.
The continued higher rise is expected to head to the previous focus level of 1.22000 which was tested at the end of last week but failed to break.
