Investors are on alert with early indications of a bearish trend change again on the price chart of the GBP/USD currency pair after a bullish pattern has been exhibited since the beginning of the week.
Is the US dollar back on track to strengthen again?
The initial strengthening shown by the US dollar starting in the European session continuing into the New York session yesterday was supported by the release of private sector employment data in the United States (US) as well as the US service sector survey data which recorded good readings.
However, the strengthening momentum of the US dollar did not continue at the end of the New York session, seeing the king of the currency weaken slightly again.
The Pound is likely to trade cautiously in the market as investors focus on the latest developments regarding Russia's plans to cut services and limit exports to the country.
If we examine the price movement on the chart of the GBP/USD currency pair, the increase displayed this week is seen to have failed to pass the 1.15000 level before the downward price pattern began to appear on Wednesday yesterday.
The price hovering at the height of around 1.14900 plunged around 250 pips to the 1.12300 level before rebounding to close the New York session trading above the 1.13000 level.
However, sparking expectations for an initial change in the price trend is a decline below the Moving Average 50 (MA50) barrier level on the 1-hour time frame on the GBP/USD chart which is likely to end the previous bullish pattern.
If the MA50 barrier fails to break through the price on today's rise, investors should be prepared to expect a bearish situation to continue yesterday's decline.
The price will drop to around 1.12000 before the decline continues to around 1.11000 which was one of the price focus levels last week.
However, on the other hand, if the price continues to resume the previous increase, passing 1.15000 will be a signal for the price to continue the bullish trend movement.
The target for a higher price increase can reach up to around 1.16000 before further to the height of 1.18000.
