Price gains remained on the chart of the GBP/USD currency pair yesterday Wednesday despite UK inflation data published with a bearish reading yesterday.
Focusing on the European session yesterday, the UK consumer price index (CPI) met the forecast to decrease to 2.0% level but the Pound showed a positive reaction with the increase after the data was published.
In addition, there is more room for the Pound when the US dollar moved flat yesterday as the United States (US) market was on holiday.
The increase of the Pound, however, is seen to be limited and returns to relax to resume trading in the New York session.
Investors are taking precautions to first await the results of the Bank of England (BOE) policy meeting today with the market forecast that interest rates will be maintained at 5.25%.
However, with the inflation rate showing a decline yesterday, will the BOE make a surprise to lower interest rates as the European central bank (ECB) did during the day?
Examining the GBP/USD chart, the price that leveled at 1.27000 in the Asian session yesterday then showed an increase in the European session to a high level of 1.27400.
The price dropped back to around 1.27200 at the close of the New York session and flattened around that continuing trading in the Asian session this morning (Thursday).
The price is also seen to be still above the Moving Average 50 (MA50) support line on the 1-hour time frame on the GBP/USD chart, which indicates a bullish movement signal.
The bullish pattern if it continues today is likely to surpass yesterday's level before heading towards the concentration zone at 1.28000.
However, if the reaction of the BOE meeting soon pressures prices to fall below the 1.27000 level, this will be a warning for a change to the pattern of price declines.
The closest focus is on the current support level of last week around 1.26600 before the price extending the decline will target the 1.26000 zone.
