Stealing the spotlight yesterday Wednesday was the drastic movement of the Pound currency which suffered a significant drop in the New York session.
The situation is driven by the political uncertainty currently plaguing the UK and also affects the current performance of the Pound in the market.
UK Prime Minister Keir Starmer has been urged to reconsider his government's welfare reform plan after receiving major opposition from within his own party where almost 50 members of the Labour party voted against the plan.
The flaws in the UK leadership if not repaired immediately could add to the pressure on the Pound, reversing the excellent performance of the previous week.
On the GBP/USD currency pair chart, a sharp price drop can be observed yesterday after leveling off above the 1.37000 zone.
A daily drop of almost 200 pips was displayed yesterday reaching around 1.35700 before bouncing back to close the New York session trading at 1.36300.
The slow price increase continued today (Thursday) which was seen heading back towards the 1.37000 level again.
However, the price movement which is still below the Moving Average 50 (MA50) resistance line on the 1-hour time frame on the chart continues to suggest a bearish signal for the price.
If the price continues to decline and penetrates the 1.36000 zone, a new weekly low will be recorded with the target shifting to 1.35000.
On the other hand, if it makes an increase beyond 1.37000, the price will signal to resume the previous upward pattern.
The height of 1.37900 on Tuesday will be attempted by the price to overcome before recording the latest 3-year high with the target to exceed 1.38000.
