The turbulent political and financial developments in the UK in recent times are also seen as contributing to concerns in the global market.
However, the Pound currency in the early trading of the European session yesterday performed brilliantly showing a surge in value following the latest developments in the UK.
The government under the leadership of Prime Minister Liz Truss announced to first delay the tax cut plan after receiving criticism from MPs.
This is seen as giving room for the central bank of England (BOE) to continue its policy tightening measures without being affected by fiscal easing by the government.
However, the Pound remains at risk of experiencing a decline as the BOE also announced a long-term bond purchase plan which is one of the steps in policy easing.
For the time being, the Pound is still trading strong against the US dollar which has weakened after being affected by the dismal release of the United States (US) manufacturing sector survey data yesterday.
The price movement on the chart of the GBP/USD currency pair still maintains the bullish pattern of last week with the daily increase recorded on Monday yesterday of more than 200 pips.
The price remained moving above the support level of the Moving Average 50 (MA50) on the 1-hour time frame of the price chart with the increase from the level of 1.11000 having successfully reached the target height at 1.13000 at the end of the New York session.
The price movement is slower and flat continuing trading in the Asian session this morning (Tuesday), but remains hovering around 1.13000.
With the displayed pattern, the price looks likely to continue the rise higher with the next target located at the resistance zone of 1.14500.
A further move higher has the potential to reach as high as 1.16000 to set a new 3-week high.
On the other hand, if it changes direction to make another dive this week, the 1.1200 and 1.11000 levels will be the focus for investors to examine the price reaction at the following levels.
If the price manages to break through lower and starts to move below the MA50 level, the signal of a change in the bearish trend will trigger the price expectation to drop towards the 1.09000 zone.
