The price chart of the GBP/USD currency pair in the New York session yesterday showed a price jump of up to 240 pips!
Surely everyone is aware, the significant movement of the market yesterday was driven by the indication of Federal Reserve (Fed) Chairman Jerome Powell's statement at the presentation of the monetary policy report.
The hawkish signal was clear from Powell when he stated that the central bank would resume more aggressive tightening measures after this.
This is based on published US economic data which is still strong and still leaves room for the Fed to continue their policy tightening.
The pound is seen as powerless to resist the urge to strengthen the US dollar following the market reaction in the New York session.
If observed on the GBP/USD chart, the price initially rose slightly to the level of 1.20600 and then plunged to reach the level of around 1.18200.
The 1.19000 support zone which is expected to be tested was also hit by the price at the same time recording the latest 13-week low.
Further declines in prices are expected to continue today to test the next concentration zone at 1.18000 before extending further declines to lower levels.
However, if there is a price rebound, the important zone of 1.19000 will become the focus again, which was previously a support for the price.
If the increase fails to pass the zone, it is likely that the price decline will continue again, continuing the bearish pattern that has been exhibited.
