After the UK jobs data report took center stage last Tuesday, the UK economic growth data on Wednesday was the focus of investors to assess the current movement in the Pound currency.
Although the monthly growth reading of the UK economy recorded a contraction, but the Pound was seen to be successfully moving positively during trading on Wednesday yesterday.
This is driven by expectations by the European central bank's chief economist, Huw Pill, who said there will be a bigger increase in interest rates next month following the implementation of bond buying measures by the Bank of England (BOE) which could affect the objective of lowering the inflation rate.
Therefore, investors witness the increase in the value of the Pound in the market compared to the US dollar which is being traded cautiously ahead of the release of the United States (US) inflation data which is the focus today.
On the price chart of the GBP/USD pair, the price has shown a daily gain of around 200 pips yesterday to reach back to the resistance zone at 1.11000.
The price increase that also crossed the Moving Average 50 (MA50) obstacle level in the 1-hour time frame on the price chart also triggered early expectations for a bullish trend change to happen.
But the price increase needs to continue to surpass the height reached on last Tuesday's surge for a clearer signal.
The price increase will test the resistance at 1.12000 before continuing the further climb at the 1.13000 target.
However, if the price fails to pass the resistance of 1.11000, a downward price rebound can occur with the expectation that the price will move back to the RBS (resistance become support) zone of 1.09000.
A further drop in price if the US dollar continues to strengthen will pass the 1.09000 zone with the next target reaching around 1.07700.
The support zone at 1.04000 remains the all-time price record low, and may become the next price focus if the bearish price trend continues.
