The US dollar was seen successfully rocking the market in Tuesday's trading yesterday by putting other major currencies under pressure including the Pound.
Investors remain concerned over the risk of a global recession that continues to weigh on financial markets, prompting the US dollar to steal a chance to strengthen with a survey by expert analysts seeing the United States (US) face recession risk above 70%.
Focus on the New York session soon, the US services PMI data of the ISM survey will be monitored before investors' focus will shift to the minutes of the FOMC meeting early Thursday morning.
Developments in the UK, news of the shocking resignations of two senior cabinet ministers have put a strong emphasis on the Pound yesterday.
The resignations of Finance Minister Rishi Sunak and Health Secretary Sajid Javid became the main focus seen as an act of protest against Prime Minister Boris Johnson retaining Chris Pincher’s post after allegations of his sexual misconduct.
Even several other key positions in the leadership of the Conservative Party led by Boris Johnson have also resigned showing the political unrest in the UK is increasingly critical and confidence in the leadership of Boris Johnson is fading.
If you look at the movement on the chart of the GBP/USD currency pair yesterday, the price has shown a daily decline of up to 200 pips to record the latest 2 -year low.
In yesterday's European trading session connected to the New York session, the price has managed to make a decline from the level of 1.21000 broke the support zone of 1.2000 and has overcome the low of 1.19400 reached on 14 June.
The decline is seen to have given a picture of a bearish trend in the price, besides the price is also seen to remain moving below the Moving Average 50 (MA50) barrier level in the 1 -hour time frame which is an indicator for investors.
The price slightly rose again above the 1.194000 level in continued trading in the Asian session this morning (Wednesday), but if the bearish trend is maintained, the price has the potential to continue further lower and could reach up to the level around 1.18000.
On the other hand, if the decline fails to continue, the initial rise is seen to retest the 1.20000 zone before the higher rise will head back to the 1.21000 level after passing the MA50 barrier for an early signal of a price trend change.
Prices that continue to rise higher will push expectations up to the resistance zone at 1.22000.
