The GBP/USD currency pair chart on Wednesday saw a drastic jump of around 120 pips after a horizontal movement.
In the European session yesterday, UK inflation data surprised investors when it recorded a higher reading for June compared to forecasts to remain the same as the previous month.
However, the price jump that occurred was not due to the data as the movement still showed a slow pattern in the European session.
On the contrary, the change in direction that occurred was in the New York session following the reaction of the US dollar currency which experienced a significant depreciation.
This was driven by the issue that was in focus yesterday regarding President Donald Trump’s threat to remove Federal Reserve (Fed) Chairman Jerome Powell.
Although Trump denied the news published by Reuters, the market still showed a negative reaction when the financial institution was threatened.
After the price moved horizontally below the 1.34000 zone, the price jump was displayed until it reached a level of around 1.34800.
Having not yet touched the 1.35000 level, the price continued to decline again and ended around the 1.34200 level at the close of the New York session.
In the Asian session this morning (Thursday), the price slowly fell below the 1.34000 zone again, and the movement below the Moving Average 50 (MA50) resistance line signaled a continuation of the bearish trend.
The UK employment data report published in the European session did not show good readings, with the unemployment rate increasing by 4.7% for May compared to the forecast to remain at 4.6%.
If extended lower, the price will record a new 8-week low with the target moving to 1.33000.
However, if the rebound occurs again above 1.34000, the zone at 1.35000 will still be attempted to be broken.
Next, with a clearer signal of a trend change, the price will return to targeting the early July focus zone at 1.36000.
