After waiting for several weeks, finally an important resistance level on the chart of the GBP/USD currency pair was breached yesterday.
The intended level is 1.27000 which was broken on the rise in the New York session yesterday after several failed price attempts before.
The situation is driven by the continued depreciation of the US dollar after the service sector ISM survey data published yesterday recorded a declining figure for February, but still above the 50.0 point level.
However, due to both readings for the service sector yesterday and manufacturing last Friday showing a decline, concerns about the United States (US) economy were slightly triggered and made the tendency for the Federal Reserve (Fed) to move towards policy easing.
So the US dollar remains weak in the market and continues to give room for the Pound to rise to its latest 5-week high.
The daily gain of around 60 pips that was displayed yesterday crossed the 1.27000 resistance and then reached a new high around 1.27350.
The price retreated back to the 1.27000 level at the close of the New York session and remained flat around that level in Asian trading this morning (Wednesday).
With this bullish signal displayed, the price has the potential to continue climbing higher above the level reached yesterday to record the latest high level again.
The target is to head to the next concentration zone which is at 1.28000.
However, if the price fails to hold above the 1.27000 level, instead showing signs of decline, it will be a warning to investors.
The price may decline again towards the 1.26000 level which became the price support level during last week's trading.
