Price movements on the chart of the GBP/USD currency pair began to reverse direction on Tuesday's trading yesterday as the market reacted to the published data.
Focused for several sessions, the release of PMI data for the manufacturing and services sectors for major economies has driven currency movements.
The service sector readings for Germany and the UK were excellent, while the manufacturing sector recorded declining figures for April.
Meanwhile, the PMI data for the United States (US) recorded disappointing figures for both with the manufacturing sector starting to record readings below the 50-point threshold.
Concerns about the current health of the US economy pushed the US dollar down significantly in the New York session yesterday.
However, analysts await the release of US Gross Domestic Product (GDP) data and the PCE price index to determine a clearer direction of movement.
Examining the GBP/USD chart, the price which had plunged to the lowest level of the year at 1.23000 last Monday recovered again yesterday.
A trend change is identified by an increase in price that crosses the Moving Average 50 (MA50) line on the 1-hour time frame on the chart.
The jump in the European session continued to the New York session passing the 1.24000 resistance and reaching the height of the 1.24500 level.
The price is expected to continue moving higher towards the resistance at 1.25000 which was the focus tested in the previous week's trade.
A more bullish signal for the price can push the increase to continue with the target moving to around 1.26000.
However, if the price falls again, the 1.24000 level will be an early stop to be tested and the price reaction will be observed.
If it breaks down, the price will continue to decline towards the 1.23000 support zone which was reached earlier in the week.
