The movement of the US dollar currency is seen moving erratically towards trading at the end of this week after the market reaction to the release of inflation data and the United States (US) producer price index.
Following the shift from the US inflation data, the output price index (PPI) for July is seen as closing at -0.5% versus the 0.2% forecast, being the first decline recorded for more than 2 years.
The investment horizon for the base setting by the Federal Reserve (Fed) now faces two possibilities where there will be an increase of 50 principal points or 75 principal points in the September meeting.
The Pound failed to take advantage of the room to continue to advance above the weaker US dollar, as investors increasingly wary of the release of UK economic growth data in the early European session soon.
Observing the price movement on the chart of the GBP/USD pair on Thursday's trading overnight, the price moved more flat compared to the significant spike that occurred last Wednesday.
Unable to overcome the high of the previous day's surge, the price however still held above the 1.22000 zone so trading continued into the Asian session this Friday morning.
Investors are still assessing price movements in a bullish trend which is still supported by the level of support of the Moving Average 50 (MA50) on the 1-hour time frame on the GBP/USD chart.
If the market manages to contain the price rather than make a decline and the price starts to rise again from the 1.22000 zone, the price increase will continue with the target still being seen at the 1.23000 high barrier.
This level is still failing to be tested since last week's rise, and if the price manages to break through that level, the latest 8-week high will be listed possibly reaching 1.24000.
On the other hand, if the initial price shows a contraction below the MA50 level and the 1.22000 zone, the price is seen to be heading back to the support level of 1.21000 while reducing the gains made during the surge in the previous inflation data.
The continued decline in prices is likely to break the price support zone at 1.2000 as was the situation of the decline at the end of last week.
