The bearish pattern continued for the fourth consecutive day on the GBP/USD currency pair chart following the reaction to the United States (US) inflation data published yesterday.
With the increase in the inflation rate in June being higher than forecast, it shows the impact of Donald Trump's tariffs on goods prices.
Expectations for the Federal Reserve (Fed) to continue maintaining policy and not rushing to lower interest rates, prompting a further recovery in the value of the US dollar in the market.
On the GBP/USD chart, the price fell to a fresh 3-week low with a decline that reached the target level of 1.34000 yesterday.
Meanwhile, in the European session today (Wednesday), the UK inflation report was the focus, which saw price movements slightly increase beyond the 1.34000 level again.
This follows the UK consumer price index (CPI) reading for June which was expected to remain at 3.4% instead of recording an increase to 3.6%.
This is slightly supportive of the rise in the Pound, but the price on the GBP/USD chart is not seen to show any significant movement.
Still moving below the Moving Average 50 (MA50) resistance line on the 1-hour chart, a bearish signal suggests that the price will continue the downward trend further.
Failure to hold above the 1.34000 level would expect the price to head towards a new lower target around 1.33000.
If it reaches that level, the price will record a new 8-week low after last trading around that level in mid-May.
On the other hand, if the price makes an increase above the MA50 barrier, investors will be cautious for expectations of a trend change again.
The initial increase that continues is seen to test the 1.35000 level before heading towards higher levels after that.
