UK inflation data published yesterday signaled that the central bank will need to continue raising interest rates after the annual reading of the UK consumer price index jumped to 10.4%, missing expectations for a 9.9% reading.
Therefore, even though the movement is quite mixed, the Pound is seen to have successfully increased against the US dollar when the market reacted to the results of the FOMC meeting earlier this morning.
The Federal Reserve (Fed) met forecasts to raise interest rates by 25 basis points to 5.00%, and also gave a dovish signal for further monetary policy.
The market estimates that the Fed is getting closer to the end of its policy tightening phase, but for now, interest rate cuts are not yet an option.
The next focus will be on the results of the Bank of England (BOE) policy meeting with the market expecting a rate hike of 25 basis points.
Examining the price chart of the GBP/USD pair yesterday, the price initially rose to the level of 1.23000 has retreated back to around 1.22300.
But the price has surged following the reaction to the FOMC meeting reaching a new high around 1.23300 before closing the session's end trading around 1.22600.
Price movement that remains above the Moving Average 50 (MA50) support level on the 1-hour time frame on the GBP/USD chart continues to signal bullishness.
The price increase continued in the Asian session this morning (Thursday) which tried to pass the 1.23000 zone with the expectation that the increase will continue to a higher level.
The next target is to reach around 1.24000 for the price to record the latest 7-week high.
On the other hand, if the price fails to maintain momentum and starts to decline again, the price will return to the RBS (resistance become support) zone of 1.22000.
A break below the zone and also beyond the MA50 support, will trigger early expectations for a bearish trend change.
