The US dollar strengthened again in Tuesday's trading yesterday due to a visit by (US) representative Nancy Pelosi to Taiwan that reignited tensions between China and the US and gave an advantage to safe-haven trading in risky market sentiment.
Pelosi said her visit showed American support for Taiwan, but China denounced the highest-level US visit in 25 years as a threat to their peace and stability.
Meanwhile, San Francisco Federal Reserve (Fed) President Mary Daly and Chicago Fed President Charles Evans signaled that they and their friends remain firm and fully united to raise rates to the best level for the economy.
Apart from that, investors are also looking forward to the US NFP jobs report which will be published at the end of the week with expected job growth for July predicted to be lower than June.
The gloomy movement of the Pound currency last week will be warmed by the results of the Bank Of England (BOE) meeting this week with the expected increase in interest rates by 50 basis points.
The price movement of the GBP/USD currency pair in the Asian session yesterday (Tuesday) saw the price increase first before showing a daily decrease of around 100 pips triggering expectations for a change in the price trend.
Adding to the signal for a bearish trend change, the price slipped past the Moving Average (MA50) support level on the 1-hour time frame on the GBP/USD chart and closed the New York session trading around 1.21600.
A slight decrease was seen in continued trading at the beginning of the Asian session this morning (Wednesday), but showed a rise again towards the level of 1.22000 at the end of the session but showed signs of a decrease again towards the opening of the European session.
If there is a continuous price decline, the price will retest the RBS (resistance become support) zone at 1.21000 in the next sessions for a clearer bearish price pattern.
The continued decline is seen to lead to the 1.2000 level which was the focus of last week's trading.
On the other hand, if the price makes an increase again, the barrier level of 1.22000 will be passed first before a higher increase will return to the resistance zone at the height of 1.230000 which failed to be passed during the increase earlier in the week.
For a higher bullish target, the height zone at 1.24000 will be the target for the price to record the latest 7-week high level.
