The price jump on the GBP/USD currency pair chart on Tuesday yesterday managed to record a daily increase of around 140 pips after breaking out of the horizontal zone for several days.
After hovering in the 1.33000 zone, the price managed to make an increase to reach the target level of 1.34000 while the US dollar was still moving weakly in an uncertain market environment.
However, as soon as it touched the 1.34000 level, the price retreated back down driven by the recovery of the US dollar which showed a positive reaction to the development of the global tariff war.
The United States (US) and China are expected to hold trade talks this week in the hope that a solution to the tariff issue can be agreed upon.
In addition, the market is also awaiting the results of the FOMC and Bank of England (BOE) meetings which will have an impact on the US dollar and Pound.
Trading in the Asian session this morning (Wednesday) hovered around 1.33500 after gradually declining from yesterday's increase, but the price is still moving above the Moving Average 50 (MA50) support line on the 1-hour time frame on the chart, which shows a bullish signal.
If the price manages to make a comeback, the 1.34000 resistance zone will be tested again before continuing to higher levels.
The potential for the price to record a new 3-year high after breaking through the zone with the target reaching the next focus at 1.35000.
On the other hand, if the price is further pressured down, the 1.33000 zone will return to the focus as before.
If the price declines further below that zone, it is expected to reach around 1.32000.
