The US dollar managed to maintain strengthening in the market in the early trading session of the week putting pressure on other major currencies.
The dollar index was seen hitting 109, closing at its highest level since September 2002, as investors raised expectations that the Federal Reserve (Fed) will continue its aggressive tightening to tame high inflation.
The Fed is expected to hike by 75 basis points at its September meeting due to 54.5% backing the Fed to make an aggressive rate hike for the third time.
In addition, Fed President St. Louis James Bullard was among the most hawkish policymakers last week, for the Fed to reiterate its intention to continue tightening monetary policy.
But investors are also wary of expectations for the Fed's choice to slow down interest rate hikes, which could prompt a change in the direction of the US dollar in the market.
It is seen that investors are also looking forward to the publication of manufacturing and services data (PMI) of the United States (US) which is still predicted to be gloomy even though the employment sector in the US inflation is increasingly showing recovery.
As for the Pound currency, investors are also looking forward to the release of UK manufacturing and services data (PMI) in the European trading session today Tuesday to measure the current development of the UK economy after rising inflation.
Monitoring the price movement on the chart of the GBP/USD currency pair at the beginning of the week of yesterday's Monday trading session, the price was seen moving horizontally above the 1.18000 support level from the Asian session to the European trading session.
However, in the New York session, the price was seen to have managed to break through that level and shrunk to the level of 1.17600 which is the lowest level reached last July with a daily decrease of around 100 pips recorded yesterday.
Continuing on this morning's Asian trading session, the price is seen moving horizontally above the price level of 1.17600 again but is still below the support level of the Moving Average 50 (MA50) in the 1-hour time frame on the GBP/USD price chart for a bearish trend movement signal.
If the price maintains the declining momentum and drops back below the 1.17600 level, the price will record the latest 2-year low since 2020 with the next target being to reach around 1.16000.
On the other hand, if the price succeeds in making a rebound, the price will try to pass the 1.18000 level before breaking through the MA50 barrier for an early signal of a change in the bullish trend.
If the rise continues, the previous concentration levels such as around 1.18800 and 1.19400 will be resistance to be tested by the price before continuing the rise to higher levels again.
