In tonight’s New York session, the market will await the release of the United States (US) producer price index (PPI) data, with the expected reading in May recording 0.8% surpassing the April reading of 0.5%.
If the release of PPI data tonight is higher or meets expectations it could push the US dollar to continue to move stronger against other currencies to maintain its strengthening momentum.
The release of the highest US inflation data since December 1981 that was the focus of the last weekend has made the US dollar move aggressively in early trading this week towards the FOMC meeting early Thursday.
In today's European session, the focus will be on the UK employment data report with the expectation of a positive report reading, potentially supporting the appreciation of the Pound.
But the Pound's rise will be limited by the pressure of a strengthening US dollar as well as cautious investors ahead of the England central bank (BOE) policy meeting.
Examining the price movement on the GBP/USD currency pair, the price has made a decline in the European session yesterday after flattening in the previous session.
The daily decline was recorded around 200 pips yesterday hitting the 1.21000 zone continuing the bearish momentum at the end of last week.
Reaching the 1.21000 zone yesterday has recorded the latest price level since May 2020.
Continuing trading in the Asian session this morning (Tuesday), the price was seen making a slight increase but still moving in a bearish trend as the price remained moving below the Moving Average 50 (MA50) barrier level on the 1 -hour timeframe on the GBP/USD chart.
If the decline continues, the price that fell below the level of 1.21000 will head to the expected level around 1.20000 to continue to record the latest lows again.
On the other hand if a price increase occurs from the 1.21000 zone, it is likely that the 1.22800 zone will return is expected to be the initial resistance to test the price.
The price increase that continues beyond the zone will then lead to a higher target level at around 1.24000.
