The bullish pattern displayed on the price chart of the GBP/USD currency pair since the end of last week until the beginning of this week failed to continue on Tuesday yesterday.
This is due to the market's gloomy reaction to the speech by Federal Reserve (Fed) Chairman Jerome Powell at the Riskbank symposium event in Stockholm where he did not give any indication of the central bank's monetary policy.
There is no clear indication for the FOMC meeting that will take place in early February, making investors prefer not to take risks and be cautious ahead of the release of the United States (US) inflation data on Thursday tomorrow.
If you look at the price increase on the GBP/USD chart, it has reached a height of 1.22000 at the beginning of this week after following the jump during the reaction to the last NFP jobs report.
However, the 1.22000 zone is now an obstacle for the price when the decline was exhibited yesterday until the price almost reached the 1.21000 level again.
However, the support level of the Moving Average 50 (MA50) on the 1-hour time frame on the GBP/USD chart is seen to prevent further declines indicating that there is still potential for the price to resume the previous upward pattern.
After ending around 1.21500 at the close of the New York session, the slow move around that area continued at the opening of the Asian session this morning (Wednesday).
A higher rise will be expected if the price manages to break through the resistance of 1.22000 before the next target is towards 1.23000.
Reaching that height would set a new record high for the price in a 4-week trading period.
However, if there is a drop again, the 1.21000 level is seen to be tested and expected to be a support for the price.
If broken, the bearish trend change signal is likely to be clearer and the price will go back to the 1.2000 zone or even lower to around 1.19000.
