The US dollar strengthened in the last trading session last week by recording the biggest daily gain since mid-June following the impact of the publication of the US NFP employment data in the New York session.
US job gains for July rose to 528,000 beating forecasts of 250,000 for the biggest increase since February.
Apart from that, the US unemployment rate also decreased to 3.5% compared to expectations to remain at 3.6%.
The picture of the strong labor sector in the US has again fueled expectations that the Federal Reserve (Fed) may need to continue raising interest rates aggressively in the near term with an increase of 75 basis points for the third time in a row.
Monitoring the performance of the Pound currency, after the Bank Of England (BOE) meeting which saw an increase in interest rates by 50 basis points last week, still failed to support the strengthening of the Pound until the end of last week.
Next, investors will focus this week on the release of UK gross domestic product data with the expectation of recording contractionary readings for July and the second quarter.
Looking at the price movement of the GBP/USD currency pair chart last Friday, the price which initially moved flat in the Asian and European sessions then showed a plunge to the latest weekly lows to maintain the bearish pattern throughout the week.
The price has registered a daily decline of around 160 pips until reaching the 1.20000 zone after a significant plunge in the price that crossed the support level at 1.21000.
The price movement remained below the Moving Average 50 (MA50) barrier level on the 1-hour time frame on the GBP/USD chart, signaling that the price will continue to be in a continuing bearish trend during this week's trading.
After falling to the 1.20000 zone, the price is seen to bounce back towards the 1.21000 level which is now a resistance level for the price before the price closes the last trading session of the week at around 1.20700.
If at the beginning of this week's trading session the price continues to decline lower, it is expected that the price will once again test the 1.20000 level before extending the decline to some previous concentration levels such as at the 1.19400 level or at 1.18800.
On the other hand, if the price rises again and successfully crosses the 1.21000 barrier level, the price will continue to rise and the price reaction at the MA50 barrier level will be evaluated by investors for a signal of a bullish trend change that may occur.
For the expectation of a further move higher, the resistance level at 1.22000 tested last week will again become a price target to reach again this week.
