The pound managed to close last week's trading better than the US dollar when it managed to rise to its latest highest level since June 2022.
However, the positive momentum failed to be maintained at the beginning of the week yesterday by starting the opening of May trading more gloomy.
The US dollar strengthened in the New York session yesterday after positive ISM survey data for the United States (US) manufacturing sector, but analysts warned investors to be wary of volatile market movements ahead of the FOMC meeting early Thursday morning.
Examining the price movement on the chart of the GBP/USD currency pair yesterday, the price has fallen back to the 1.25000 concentration zone which is seen as the RBS (resistance become support) zone for the price.
The decline appears to have dampened the energetic surge displayed at the end of last week's closing trade which reached a high of 1.25800.
A bearish signal was observed after the price started to move below the Moving Average 50 (MA50) barrier level on the 1-hour time frame on the GBP/USD chart.
Resuming trading in the Asian session this morning (Tuesday), the price flattened slowly below the 1.25000 level with expectations that further declines will continue.
The next decline is seen to be towards around 1.24000 which was previously a support zone for the price.
However, analysts warned that the US dollar could weaken again at any time due to expectations of the Fed's monetary policy moving in a looser direction.
A further weakening of the US dollar could push the price back up from the 1.25000 zone and break through the MA50 barrier to trigger the initial signal of a bullish trend change.
The rise will continue back to the resistance zone at 1.26000 after challenging the highs reached last week.
