The US dollar managed to strengthen again putting pressure on other major currencies including the Pound on Tuesday yesterday after a dismal early week opening on Monday.
Investors' focus at the New York trading session yesterday was directed to the release of the ISM survey data for the service sector in the United States (US) for August which grew to 56.9 over July's record of 56.7.
Apart from that, the dollar index has also managed to continue its strengthening to reach the latest 20-year high of around 110.50 while the 10-year US treasury yield managed to rise to 3.34%.
As for the Pound currency, investors will be looking at the Bank Of England (BOE) meeting report that will be released in the European session soon for any new signals about the high possibility of an interest rate hike at next week's policy meeting.
Investors will also be monitoring the initial actions by the new UK Prime Minister, Liz Truss for her economic recovery plan while the UK is also struggling with an energy crisis that is putting pressure on Europe.
Assessing the price movement on the chart of the GBP/USD currency pair, the price failed to continue the consolidation made at the opening of the week of the trading session (Monday) and again signaled to continue the downward pattern of the previous weeks.
In the early morning session of Asia connected to Europe yesterday, the price was seen to have increased to test the level of 1.16000 but failed to pass the resistance before there was a further decrease of around 100 pips in the trade that continued into the New York session.
The price was then seen to have broken below the Moving Average 50 (MA50) barrier level on the 1-hour time frame on the GBP/USD chart and continued to decline in the Asian session this Wednesday morning for a more clearly bearish price pattern to be shown.
A decrease of around 60 pips in the Asian session is seen to retest the support level of 1.145000 which was reached last Monday where the price reaction at that level will attract the attention of investors.
If the price manages to continue its decline, the price will surpass the low level of the last March 2020 trade and will most likely record the lowest price since 1985.
The target for further decline is around 1.13000 or 1.12000 to form the latest support zone for the price.
On the other hand, if the price fails to break through the 1.14500 support level, it is expected that the price will jump up again to test the MA50 barrier level before giving an indication of a more bullish price movement direction.
Resistance at 1.16000 will be retested after yesterday's trading on Tuesday failed to break through.
If the price surge succeeds in crossing the barrier, the price is seen to continue its climb towards the concentration zone at around 1.17600-1.18000.
