A weekly decline of over 300 pips was recorded on the GBP/USD currency pair price chart last week following the market's reaction to the results of the Federal Reserve (Fed) and Bank of England (BOE) central bank meetings.
At first the price showed a positive movement with an increase that started from the beginning of the week until it recorded the latest 6-month high level around 1.24400.
However, after investors digested the hawkish statement by the Fed Chairman, Jerome Powell following the FOMC meeting, the US dollar strengthened significantly and pressured the Pound.
Although the BOE also raised interest rates by 50 basis points like the Fed, the Pound failed to recover.
After a sharp plunge, the price movement last Friday was seen to be more flat below the 1.22000 resistance zone.
The price that also moved below the Moving Average 50 (MA50) barrier on the 1-hour time frame on the GBP/USD chart since the end of last week also triggered a tendency for the price to drop lower this week.
If the price still fails to challenge the 1.22000 level, a further drop in price is seen to test the 1.21000 level at the nearest RBS (resistance become support) zone.
Passing the zone then expect the price to reach the 1.20000 zone or support 1.19400.
However if the price manages to surge higher after breaking the 1.22000 resistance, the price is likely to head towards the 1.23000 level and a trend change signal will be monitored.
The continued higher increase is seen to test the concentration zone at 1.24000 and potentially reach the latest high level again if the US dollar experiences a decline again.
