Although the Bank of England (BOE) surprised the market with a bigger-than-forecast interest rate hike at its policy meeting last week, unfortunately the Pound still failed to shine.
Its value continued to depreciate this week against the US dollar which is absorbing factors that support the central bank's monetary policy tightening measures.
Last Wednesday, Federal Reserve (Fed) Chairman Jerome Powell's speech re-injected the strengthening of the US dollar by reiterating that the central bank will continue to raise interest rates several more times by the end of 2023.
It can be observed on the chart of the GBP/USD currency pair that the price reaction shows a significant drop after passing the important support level at 1.27000.
The price has finally touched the next focus level at 1.26000 as the decline continues again in the New York session yesterday.
The situation is driven by the economic growth data of the United States (US) which saw the final reading show a figure that jumped further than the forecast and also the previous reading.
This continues to add pressure on the Pound, and prices are likely to continue the downward trend at the close of June 2023.
The price movement slowed above the 1.26000 zone in the Asian session this morning, but remained hovering below the Moving Average 50 (MA50) barrier level on the 1-hour time frame on the GBP/USD chart, indicating a bearish movement signal.
If the price continues to decline below the 1.26000 level which is now the support level when making the price, the target is to head towards the 1.26000 zone.
The level was tested on June 12 before the market witnessed a surge in prices that recorded the highest level since April 2022 during that week.
On the other hand, if there is a rebound in price, crossing the MA50 barrier will expect the 1.27000 level to return to the focus to be tested again.
If it manages to pass to a higher level, it is possible that the resistance zone of the previous week at 1.28400 will be reached in price.
