GBP/USD Breaks $1.2200, Hits 7-Week High!


 The price chart of the GBP/USD currency pair showed a surge at the beginning of the week to record a new 7-week high, maintaining a bullish movement pattern.

The sterling pound strengthened yesterday, but investors will return to caution ahead of the central bank of England (BOE) meeting on Thursday.

The FOMC meeting is also being awaited by the market in the early hours of Thursday morning while investors watch the US dollar droop as it begins trading early this week.

The global banking crisis is still given attention in the market which is seen as a factor disrupting the direction of market movement.

Looking at the GBP/USD chart yesterday, the price initially hovered slowly at the 1.22000 resistance zone before finally breaking through it.

The price managed to reach a recent high around 1.22800 before leveling off around that until the end of the New York session.

After exhibiting a bullish pattern for the third day in a row and the price remaining above the Moving Average 50 (MA50) support level on the 1-hour time frame on the GBP/USD chart, further upside is expected.

The next resistance at 1.23000 is seen to be the focus to be broken before the price extends its next climb to record new highs.

However, if the price drops again, the level of 1.22000 which is in the RBS zone (resistance becomes support) will give an interesting reaction to the price.

If the breakout is lower and the price also crosses the MA50 support, the decline is expected to continue with a target heading towards around 1.21000 first before re-hitting the 1.20000 concentration zone.