The US dollar managed to undercut the Pound currency in the early trading session this week after successfully maintaining the strengthening momentum that started at the end of last week.
The increase in the US dollar has been supported by the change in market centimeter factors which are again considered risky (risk-off) as investors scrutinize the release of Chinese economic data at the beginning of the week yesterday with readings that were worse than forecast.
Therefore, the market gives an advantage to safe-haven currencies, including the US dollar, which has now strengthened again, putting pressure on other major currencies in the market, including the Pound.
Investors are wary of the Pound trading ahead of the release of UK jobs data at the start of the European session shortly before Wednesday's UK inflation data is expected to be the driver for the British currency's movements.
Pay attention to the price movement on the chart of the GBP/USD currency pair, it is seen that the price has made a daily decrease of around 100 pips at the beginning of the week yesterday following the continuous strengthening of the US dollar which pushed the price to a lower level.
The drop in price that managed to break the 1.21000 price barrier level has reached the daily low around 1.20500 yesterday before bouncing back up to test the 1.21000 level again which has now become the latest resistance for the price.
The price then made a decline again to stay below the Moving Average 50 (MA50) price barrier level on the 1-hour time frame on the GBP/USD chart to show that the bearish trend is still maintained.
The horizontal price movement continues into the Asian session this morning (Tuesday), but with the pattern displayed investors expect the decline to continue towards the 1.20000 support zone where it previously became a price bounce zone when tested in early trading last August.
A lower price decline and successfully crossing the zone will then be seen to the next concentration levels at 1.19400 and 1.18800.
If the price fails to continue the decline lower and instead shows a rebound, the resistance at 1.21000 will again be a focus to be tested before signaling a trend change once the rally continues past the MA50 barrier level.
For the next increase, the price will target the previous concentration levels such as the resistance of 1.22000 before heading to the height zone at 1.23000.
