In contrast to the relaxed opening of the week as before, the Asian session on Monday yesterday did not wait long to continue to shock the market witnessing the aggressive movement of the Pound currency which experienced a decline until it recorded the latest all-time low (all-time-low).
Imagine that the Pound only took a few hours to plunge up to 500 pips on the main chart of the GBP/USD currency pair yesterday.
This is due to the announcement of the biggest tax cut in the UK in 50 years, a drastic move by the new Finance Minister Kwasi Kwarteng under the leadership of Prime Minister Liz Truss.
The easing of government policy is to offset the risk of an economic downturn in the UK after the central bank of England (BOE) increased interest rates by 50 basis points last week.
This situation has also given rise to expectations of a rate hike of up to 200 basis points by the BOE after this to increase the value of the Pound which has fallen to its latest low.
On the GBP/USD chart, the price saw a 500 pips dive below the 1.04000 level at the beginning of the Asian session, but the price managed to bounce back higher than the dive by around 600 pips.
The price managed to record a daily high around 1.09300 before closing the New York session lower again around 1.06800.
There was a slow increase displayed in the Asian trading session on Tuesday morning, but the price was seen to be still moving in a bearish trend where the Moving Average 50 (MA50) barrier on the 1-hour time frame on the GBP/USD chart still prevented price increases.
If the price resumes the decline in the following sessions, the latest support zone at 1.04000 will again be the focus to be challenged.
And it's not impossible for prices to drop lower to set new record lows again this week after the drastic price action displayed yesterday.
As for the expectations for the price increase, passing the MA50 barrier and overcoming the high level reached yesterday, the price has the potential to go back to the resistance level of 1.11000 after the bullish trend change signal.
Next, the previous focus levels such as 1.12000 and 1.13000 will be retested again for a price pull reaction.
