The price chart of the GBP/USD currency pair on Tuesday yesterday saw a daily drop of up to 180 pips surprising investors.
After being slow in the Asian session, price movements started to pick up at the beginning of the European session with the strengthening of the US dollar putting pressure on the Pound falling to a 6-week low.
Investors are likely to place expectations for the strengthening of the US dollar ahead of the minutes of the FOMC meeting which will be published early Thursday morning.
Meanwhile, investors are also wary of the relatively risky market sentiment following reports of an increase in Covid-19 cases in China following the recent easing of movement restrictions.
The US dollar is seen to have a slight edge, but a change in price direction can undoubtedly happen at any time.
After the price on the GBP/USD chart fell to around 1.19000, there was a rebound in the New York session around 150 pips testing the Moving Average 50 (MA50) barrier level on the 1-hour time frame of the chart.
Failing to cross the barrier, the price dropped again and closed the end of the trading session below the 1.2000 zone which was previously a price support zone, but was successfully broken through.
The 1.2000 zone is now a resistance for the price where trading continuing into the Asian session this morning (Wednesday) saw the price hovering testing the resistance.
A further decline in price will be expected to lead to the next concentration level around 1.18800.
The continued decline will reach the support zone at 1.18000.
On the other hand, if the price manages to bounce back above the 1.2000 zone, breaking through the MA50 barrier will trigger a bullish trend change signal.
The price is about to go up and test the resistance zone at 1.21000 which has been tested for the past few weeks.
Breaking that resistance, the target for a higher upside is around 1.22000 for the price to record the latest high.
