The GBP/USD currency pair chart showed a jump of over 100 pips in daily gains at the opening of the week.
This was due to the dismal performance of the US dollar which was influenced by the downgrade of the US government's credit rating by Moody's due to concerns about the country's excessive debt.
The Pound traded better than last week as it took advantage of the US dollar's depreciation, but investors will be cautious ahead of the UK inflation report on Wednesday.
Examining the movement on the GBP/USD chart yesterday, the price started an initial surge at the opening of the Asian session approaching the important level of 1.33000.
The price slowed down around that area while being seen climbing above the Moving Average 50 (MA50) support line on the 1-hour time frame which shows an early signal for a bullish move.
the price then jumped 100 pips from the 1.33000 level to reach the target at 1.34000.
However, as soon as it touched the latest high, the price began to decline again, retreating to around the 1.33500 level before leveling off until the Asian session this Tuesday morning.
The price increase is still expected to continue to penetrate the resistance zone at 1.34000, thus surpassing the trading levels of previous weeks.
If successful, the price will target an increase towards around 1.35000 and record the latest 3-year high.
However, if the opposite situation occurs, the price decline will be shown again with the closest focus being at the 1.33000 level.
A lower decline below that level will trigger a bearish signal and the price risks continuing its decline to the 1.32000 zone.
