Focusing early in the European session yesterday was the release of UK inflation data when the consumer price index was reported to have jumped back to a 40-year high, rising to 10.1% compared to a slight drop to 9.9%.
This situation also caused concern for the global market when the high risk of inflation is still difficult for major economies to deal with.
However, the high UK inflation reading is seen to have failed to stimulate the strengthening of the Pound's value in the market yesterday. It is likely that investors have yet to put their faith in the political uncertainty in the UK under Prime Minister Liz Truss.
Meanwhile, the US dollar traded firmly again yesterday with statements by members of the Federal Reserve (Fed) who are still hawkish about the central bank's policy tightening which is expected to continue until the end of this year.
The price chart of the GBP/USD currency pair is seen to continue the downward trend yesterday after the initial signal of a change in price direction last Tuesday.
A daily decline of around 170 pips was recorded on Wednesday yesterday with a bearish price movement signal assessed when the price has moved below the Moving Average 50 (MA50) barrier on the 1-hour time frame on the chart.
The price started to slow down around the 1.12000 focus level at the end of the New York session until it continued in the Asian session trading this morning (Thursday) with the expectation that the downward trend will continue.
For the expected further price drop, the next focus level is at 1.11000 before the RBS (resistance becomes support) zone at 1.09000 will be the next target for the price.
However, if the price manages to make a rebound from the current level of 1.12000, the initial resistance that will come to the attention of the price is at 1.13000.
Re-crossing the MA50 barrier will signal an early bullish trend change before the price continues its rise towards the 1.15000 resistance zone.
