Interesting to talk about the price action on the chart of the GBP/USD currency pair yesterday Wednesday following the release of important data.
The latest UK consumer price index (CPI) came in at 10.1% compared to forecasts for a slight decline to 9.8% from the previous reading of 10.4%.
Inflation that is still high in the UK is a concern and the market expects interest rate hikes to continue by the Bank of England (BOE) at the next policy meeting.
The Pound currency continued to surge as soon as the data was published at the start of the European session yesterday.
Examining the GBP/USD chart, the price initially hovered slowly in the Asian session approaching the 1.24000 level which became a support level for the price.
Then, after the CPI data was published, the price jumped around 70 pips reaching a height of 1.247000.
However, the higher rise failed to continue as the US dollar which strengthened again in the market pressured the price back down to around 1.24000.
It didn't end there, in the New York session the price bounced back from the 1.24000 level and reached the height of 1.24700 reached in the previous session.
Next, the price slowly closed the end of the New York session trading around 1.24400.
Continuing the slow movement in the Asian session this morning, the price crossed above the support level of the Moving Average 50 (MA50) on the 1-hour time frame on the GBP/USD chart, which still shows the potential for the price to continue climbing.
If the price rises and yesterday's highs are successfully overcome, the price will again test the resistance at 1.25000.
Next, last week's high level around 1.25400 will be the next target if the price continues to rise further.
However if the price shows a plunge breaking through the current support level at 1.24000, it will be a bearish signal to investors.
The price can drop to around 1.23000 to test the concentration zone and the reaction to the zone will be an indication of further movement.
