The market movement is flat while investors await the results of the FOMC meeting early Thursday morning which is predicted for the Federal Reserve (Fed) to once again make an aggressive increase for the second time by 75 basis points which will trigger a drastic movement for the US dollar.
But the focus will first be directed to the reading of the United States (US) consumer confidence data in the New York session tonight (Tuesday) which will provide an initial impression of the inflation rate with the forecast of the latest reading slightly shrinking compared to the previous month's reading.
With the continued depreciation of the US dollar, the Pound currency was seen successfully trading higher against the US dollar at the beginning of the week yesterday.
Investors remain wary of the Pound trade while the focus is on the Bank of England's (BOE) meeting next week which is likely to rule out a bigger interest rate hike in August instead sticking to expectations of a 25 basis point increase.
Examining the price movement of the GBP/USD currency pair, the price was initially seen to be moving horizontally during the Asian trading session yesterday, but continuing into the European session, the price began to rise again until it managed to overcome last week's high level.
However, the price which registered a daily increase of around 130 pips which reached a level around 1.20850 failed to continue the higher increase before shrinking again in the trading of the New York session to close the trade around 1.20400.
Continuing on this morning's Asian trading session (Tuesday), the price is seen to continue increasing closer to the height of 1.21000 which is the concentration resistance zone to be tested.
The price movement is still considered to remain in a bullish trend where the price moves above the support level of the Moving Average 50 (MA50) on the 1-hour time frame on the GBP/USD chart.
For the expectation of a higher increase that will continue, the barrier level of 1.21000 will be breached for the price to record the latest 4-week high level with the target for the next increase being towards the 1.22000 zone.
On the other hand, if the price shows a bearish trend change pattern again after this, the initial support level at 1.20000 is seen to be tested first before displaying a clearer price decline pattern.
Next, a further drop in price will lead to the 1.19400 level to be tested before continuing the lower decline towards the 1.18800 level.
For a longer period of downward movement, the price is expected to return to the focus support zone at 1.18000.
