Investors had to witness a daily plunge of up to 100 pips in price on the chart of the GBP/USD currency pair yesterday. What happened?
Expectations for the US dollar to continue to move weakly slipped as market sentiment on Tuesday changed at the risk of being triggered by fears of a renewed banking crisis.
It was reported that First Republic Bank shares plunged nearly 50% while UBS reported a 52% decline in quarterly earnings.
This has made the attraction of safe-havens including the US dollar increase again in the market.
However, investors remain cautious expecting that there is still potential for the US dollar to depreciate again ahead of the FOMC meeting in early May.
On the GBP/USD chart, it can be observed that the price rose slowly in the Asian session yesterday to the level of 1.25000 but the price started to bounce from that level.
Next, a more significant decline was displayed on the European and New York sessions until it reached the 1.24000 zone again which became the latest support for the price.
The price then slowed down around the close of trading in the New York session and resumed the opening of the Asian session this morning (Wednesday).
The price drop is expected to continue below 1.24000 with the next price target being towards 1.123000.
Hitting that level will mark the latest low for the 3-week trading period.
However, if the price manages to bounce back from the current zone of 1.24000, the resistance at the level of 1.24000 yesterday will be tested again.
Continuing the increase will see the previous week's high level around 1.254000 and will try to be overcome before the price records a new high level.
