In the previous market risk environment that started to subside, the US dollar is seen to have managed to maintain its strengthening after the release of the United States (US) service data of the ISM survey which was stronger than expected at the focus of yesterday's New York session.
Meanwhile, several US Federal Reserve (Fed) officials are of the view that aggressive interest rate hikes should continue with an expected increase of 75 basis points at the FOMC meeting in September likely to be implemented again.
The focus will be on the results of the Bank of England (BOE) policy meeting in the European session shortly which will influence the movement of the Pound with an expected interest rate hike of 50 basis points for the highest increase since 1995.
Observing the price movement on the chart of the GBP/USD currency pair, the price was seen flat at the resistance level of 1.22000 in the European session yesterday before the price decreased in the New York session until it touched the support level at 1.21000.
However, the price bounced back from that level and closed the end of the New York session at around 1.21400.
The price drop is still expected to continue with movement below the Moving Average 50 (MA50) barrier level on the 1-hour timeframe on the GBP/USD chart as a bearish signal, in addition to the declining pattern exhibited.
If the price continues the decline lower, the price will test again the support level at 1.21000 before continuing the decline lower to show a more clear bearish trend movement.
The next decline is seen to go to the 1.20000 level to test the resistance become support (RBS) zone.
On the other hand, if the price manages to show an increase again, the barrier level at 1.22000 will be tested and before the price crosses it and also the MA50 barrier will trigger a signal for a bullish trend change on the price chart.
A higher strengthening of the price will lead to the height of 1.23000 which is an important resistance zone after the price increase at the beginning of the week failed to pass to a higher level.
