After investors focused on a speech by the Governor of the central bank of England (BOE), Andrew Bailey yesterday, the Pound was seen displaying a decline and moving weakly until the end of the New York session.
Investors rated Andrew Bailey’s speech more dovish in tone after warning of commodity market volatility and financial stability risks. He also informed of the risks to the inflation rate.
The annoyance was translated into price movements on the GBP/USD currency pair chart by showing a bearish price for the market opening earlier in the week yesterday.
Once the price has started to decline in the Asian session below the 1.31700 level, the decline has continued to the New York session below the 1.31000 level with a daily decline of over 100 pips recorded.
The price is giving an indication to move back in a bearish trend that remains below the Moving Average 50 (MA50) barrier level on the 1 -hour time frame on the GBP/USD chart.
In trading that continued in the Asian session this morning (Tuesday), the price hovered weakly around the 1.31000 level which is now the latest resistance level for the price.
A lower decline will be expected by investors for the price to head to the key support zone of 1.3000 which was tested in mid -March.
However, investors did not rule out the possibility of the Pound rebounding on the chart due to fundamental factors of the central bank which is in the phase of tightening monetary policy after 2 interest rate hikes this year.
If the price manages to rise again, the 1.31700-1.32000 zone will be an important zone to re-test the price first.
Passing the resistance in that zone in turn will push the price up towards the 1.33000 resistance zone which failed to be broken when tested last week.
