Pound Sterling continued its dismal performance at the opening of trading earlier this week.
The focus is still on the implementation of temporary quantitative easing (QE) by the Bank of England (BOE) with government bond purchases amounting to £10 billion per day in an effort to offset the risk of an economic recession after announcing an interest rate hike at the last policy meeting.
Meanwhile, investors began trading early this week with market sentiment at risk following reports of a rekindled Russia-Ukraine war with the two exchanging blows.
The US dollar which has an advantage in a risky market environment is expected to increase its dominance over the Pound currency this week.
Examining the price movement on the chart of the GBP/USD currency pair, the price has displayed a downward pattern since last week with a bearish signal of movement below the barrier level of the Moving Average 50 (MA50) on the 1-hour time frame on the chart continuing until the beginning of this week.
The price was seen moving more horizontally on Monday yesterday with the level of 1.11000 being a resistance for the price and the daily lowest level was reached yesterday around 1.10200.
Continuing trading in the Asian session this Tuesday morning, the price rose slightly and was seen testing resistance at 1.11000 and also the MA50 barrier level.
However, the price has retreated back from the zone and is showing signs of continuing the downtrend.
The expectation for a further drop in price if it continues today will go to around 1.09000 for the price to test the RBS (resistance become support) zone.
A further drop in price will rekindle expectations for the price to reach the support zone of 1.04000 which is the lowest price zone record of all time.
In the event of a rebound in price past the 1.1100 resistance and the MA50 barrier, investors will consider it as an early signal of a change in direction for the current price movement.
As for expectations for a bullish pattern again, the initial resistance at 1.12000 will be tested before the rise continues towards around 1.13000.
A move higher could potentially re-reach last week's resistance zone at 1.15000.
