Pound Sterling traded positive at the opening of the market yesterday after the surprise sacking of UK Finance Minister Kwasi Kwarteng at the weekend was softened by the appointment of Jeremy Hunt to the post.
Hunt announced the government's plans to scrap most of the tax plan on September 23, aiming to stabilize the financial system in the UK.
With the US dollar depreciating as market sentiment recovered with corporate earnings reports, the Pound surged to a 2-week high.
However, investors remain wary of the current movement of the US dollar with several factors still potentially inviting risk in the market such as the development of Russia's attack on Ukraine and the spread of the coronavirus in China.
On the price chart of the GBP/USD currency pair, the price started trading early in the week on Monday yesterday with a daily increase of more than 200 pips from the level around 1.22000.
The price moving above the Moving Average 50 (MA50) support level on the 1-hour time frame on the price chart remains showing a bullish signal before the price increase has reached the height level of 1.14400.
However, closing the trade at the end of the New York session, the price started to retreat slightly to around 1.13500.
Price movements today (Tuesday) until the beginning of the European session are seen as a bit gloomy with market players wary of expected changes in market sentiment.
If the price increase continues successfully, the resistance that will be tested is the 1.15000 zone, which was also the focus of trading in early October.
Successfully breaking through the following zone will record the latest 5-week high level with the target of a higher move towards the 1.16000 zone.
On the other hand, if the price starts to display a downward pattern again, the 1.13000 level will be tested and a drop that passes below the MA50 support level will trigger an expected bearish trend change for the price.
The continued decline will test several previous concentration levels around 1.12000 and 1.11000 before the 1.09000 zone will be the target for a lower decline.
