Investors scrutinized the UK inflation report published early in the European session this afternoon (Wednesday) with the Pound reacting in an interesting way.
UK consumer price index (CPI) data recorded higher figures for July, with inflation rising 3.8%, beating the forecast of 3.7%.
This also gave a reaction to the surge in the value of the Pound after trading lower since the opening of the week.
Observing the GBP/USD currency pair chart, the price has shown a downward pattern that continued until Tuesday yesterday below the 1.35000 level.
The slow decline continued in the Asian morning session to around 1.34600 before the price began to surge after the UK inflation data was published.
Trying to break through the 1.35000 level again, the price also tested the Moving Average 50 (MA50) resistance line on the 1-hour time frame on the chart which could signal a trend change.
A further increase if continued is seen heading back to 1.36000 for the price to test the resistance zone.
The zone is still 'immune' from being broken through after being tested since last June trading until the price still failed to break through it during last week's increase.
However, if the price surge shown is only temporary and retreats back down, it is likely that the downward pattern from the beginning of the week will resume.
The price could drop down towards the previous week's support level at 1.34000 which is expected to invite a price reaction around that.
Investors will remain vigilant with the volatile price movements ahead of the Jackson Hole symposium at the end of the week.
