The US dollar was seen moving stronger against the Pound in the European session trading at the end of last week to show interesting movements on the price chart in the last sessions.
The dollar index shrank back to the lowest level in the trading session last Friday to reach 105.53 while the 10-year US government bond yield also showed a decline.
United States (US) consumer personal expenditure (PCE) price index data showed an increase to 0.6%, up from expectations of 0.5% supporting the strengthening of the US dollar when the data was published, but the US dollar weakened again at the close of trading for the week.
After a gloomy performance for several weeks, movements for the Pound will be more interesting this week as investors await the outcome of the Bank Of England (BOE) policy meeting on Thursday. The BOE is expected to raise interest rates by 50 basis points for the latest meeting.
Observing the price movement of the GBP/USD currency market last Friday, the price initially showed an increase recording the latest 4-week high level around 1.22400 but the price plunged again in the European session with a daily decrease of around 180 pips recorded.
The price dropped to around 1.20700 and then rebounded before closing the last trading session around 1.21800.
A resurgence of the price above the Moving Average 50 (MA50) support level on the 1-hour time frame on the GBP/USD chart signals for the price to resume the previous bullish movement pattern.
For the expectation of a higher increase that will be continued at the beginning of this week, the barrier at 1.22000 will be breached for the price to continue its further increase towards the target zone of 1.23000 and record the latest high for 5 weeks surpassing the height reached last Friday.
For higher targets, the height zone at 1.2400 is waiting for the price to be reached if the bullish trend is successfully maintained.
On the other hand, if the price shows a decline again and signals a bearish trend change after falling below the MA50 level, the price will test the RBS 1.21000 zone first before showing a more significant decline pattern.
Next, a lower price drop will test the concentration zone at 1.20000 before recording the latest 2-week low.
