A daily gain of around 80 pips occurred on the chart of the GBP/USD currency pair on Tuesday yesterday, ending the bearish pattern displayed since last Friday and extending into the beginning of the week.
However, why is the Pound strong when the UK employment data report published in the European session yesterday is considered gloomy? Moreover, the unemployment rate recorded an increase.
The increase in prices was more driven by the re-depreciation of the US dollar in the market which was influenced by the recovery of sentiment following China's economic growth data published with encouraging readings in the previous Asian session.
Investors remain alert ahead of the release of UK inflation data at the start of the European session shortly to get an idea of the next policy setting by the central bank of England (BOE).
The bullishness shown on the GBP/USD chart yesterday reached the level of 1.24500 after successfully breaking through the important level of 1.24000.
The increase that also crossed the Moving Average 50 (MA50) barrier on the 1-hour time frame on the GBP/USD chart also changed the direction of movement to be more bullish again.
Slow above the 1.24000 zone continues trading today will expect the increase to continue testing the 1.25000 zone.
If the zone is successfully overcome, the price movement will turn out to be more bullish to regain the height of last week around 1.25400 or record the latest height of this week.
The target price for the latest high is around the 1.26000 zone.
Meanwhile, for the expectation of a price drop, a drop below the 1.24000 level and passing the MA50 will expect the bearish pattern at the beginning of the week to continue.
The price could drop down to around 1.23000 before the market waits for an attractive price reaction in that important zone for further price movement indication.
