Stealing investors' attention in yesterday's trading on Wednesday, the Pound currency continued to be hit hard after the release of UK inflation data which rose higher than expected.
The UK inflation rate rose to its latest high since 1982 of 10.1% for the July reading, with expectations for the Bank of England (BOE) to raise interest rates by half a basis point at its next meeting in September.
If that expectation comes true, it will make it the seventh consecutive rate hike and push borrowing costs to the highest level since 2008, but the latest jobs report already shows signs that the labor market is starting to 'cool'.
While the US dollar currency is affected by the focus on the Federal Reserve (Fed)'s expectation to slow down interest rate hikes at the September meeting after the FOMC meeting minutes report published early this morning was scrutinized by investors.
Before that, the United States (US) retail sales data became the focus first in the New York session which supported the strengthening of the US dollar in the beginning before the king of the currency began to exhibit a gloomy movement reaction after the publication of the FOMC minutes report.
The price movement on the chart of the GBP/USD currency pair is also seen resuming the price decline that failed to stay above the 1.210000 level and shows signs of continuing the bearish trend again after falling below the Moving Average 50 (MA50) barrier level on the 1-hour time frame in the chart.
If observed, the price was seen to show a surge last Tuesday from the 1.20000 support zone, but after the release of the UK inflation data on Wednesday yesterday, the price decreased again after reaching the high level of 1.21400 with a daily decrease of around 110 pips recorded.
The price made a decline towards the 1.20000 zone, but there was a rebound at the close of trading in the New York session yesterday due to the price reaction to the FOMC minutes.
With the price pattern displayed, a lower decline is expected for the price to shrink below the 1.20000 support zone with a target to head towards the level around 1.19400 or even lower at 1.18800 to record the latest 4-week low.
On the other hand, if there is a change in price direction that goes up again, breaking the MA50 barrier level will prompt the price to retest the resistance at 1.21000 before investors evaluate the indication for the trend change.
The continued price increase is seen to lead to the 1.22000 zone before the target is higher if the price maintains the bullish trend movement at the height of 1.23000.
