The price movement on the chart of the GBP/USD currency pair last week has seen the latest 3-week low recorded at the 1.24000 support zone.
The US dollar which managed to strengthen throughout the week continued to put pressure on the Pound currency after the previous week almost reached 1.27000 on the displayed increase.
But the situation changed on last Friday's trading which has bounced back from 1.24000 following the US dollar which started to weaken.
This is due to the market's reaction to the dovish tone of the Chairman of the Federal Reserve (Fed) stating that it is possible that the central bank will not need to raise interest rates again after this.
The price has surged around 80 pips and is giving an early signal for a trend change after rising above the Moving Average 50 (MA50) barrier on the 1-hour time frame on the GBP/USD chart.
In addition to the manufacturing and services PMI data, the market will also examine the UK inflation data that will be published this week which will be an important reference for the central bank for further monetary policy setting.
For expectations for a successful price increase to continue, the 1.25000 level becomes the nearest resistance that will be tested.
Successfully breaking the resistance will expect a higher rise to reach the previous 1.26000 concentration zone.
On the other hand, if the price plunges again this week, the 1.24000 support zone will once again be tested and the price reaction will be observed.
If it breaks lower, the price will record the latest low towards the next target at 1.23000.
