The weakening of the US dollar at the beginning of the week is seen to help open a wider path for the Pound to strengthen this week.
This is due to the observation of the UK inflation data published last week seen as still 'looking' to decrease, where the figure still remains above the 10% level.
Therefore, the Bank of England (BOE) is seen to still need to stay on the path of monetary policy tightening with the expectation that interest rate increases will continue to deal with high inflation.
Therefore, this will have the effect of a jump in the value of the Pound currency in the market.
Meanwhile, the US dollar is still expected to weaken heading into the FOMC meeting in early May with the majority of the market expecting a slower monetary policy by the Federal Reserve (Fed).
On the chart of the GBP/USD currency pair, the price is seen to have managed to surge on Monday's trade yesterday to break out of the flat zone over the past week.
The price increase was more evident in the New York session with an upward movement until the end of the session almost towards the 1.25000 level.
Continuing trading in the Asian session this morning (Tuesday), the price continued to rise to that level and began to react for investors to assess the direction of further movement.
The price increase if continued is expected to be able to pass the 1.25000 level before continuing the increase to the latest high level again.
Expectations for the next price increase are seen to test the height of the previous week around 1.25400 before the target changes to 1.26000.
However, on the other hand, if the situation changes, the price can plunge back to the support zone around 1.24000 if there are recent factors that influence the change in the current price direction.
A break lower beyond that zone would push the price up to the previous focus at 1.23000.
