Investors are cautiously awaiting further moves for the US dollar this week ahead of the results of the FOMC meeting as well as the US NFP jobs report for a clearer direction.
Last week saw a re-strengthening shown by the US dollar after the release of strong US economic growth (GDP) data, giving early signals for a change in price direction.
However, when other major currencies retreated again after the strengthening situation of the US dollar, the Pound Sterling was seen to have managed to survive and absorb the pressure at the end of last week.
In addition to the recovery of investor confidence in the UK economy after Rishi Sunak took over as Prime Minister, this week's focus will be on the Bank of England (BOE) meeting with an expected rate hike of 75 basis points to be implemented.
Thus, the Pound remains hovering around the 6-week high zone against the US dollar until trading resumes at the beginning of this week.
On the price chart of the GBP/USD currency pair, the price is hovering in the 1.16000 zone in the Asian session this morning while the market continues to puzzle over the direction of the price's further movement.
In the past week, the bullish pattern displayed has pushed the price up to the 1.16500 zone, marking a 6-week high.
However, the strengthening of the US dollar at the end of the week has stopped the increase to see a more flat price movement below 1.16000.
The price is also being evaluated for its movement around the Moving Average 50 (MA50) level on the 1-hour time frame on the GBP/USD chart which can give an indication of the next price trend.
If the US dollar succeeds in adding pressure to the Pound, the price will make a further decline with the RBS zone (resistance becoming support) 1.15000 as the initial target to be tested.
The decline continues beyond the zone expected to reach the concentration level of the previous week around 1.13000 to the support of 1.11000.
On the other hand, if the price continues to rise and continue the bullish movement pattern of last week, the price that passes the 1.16000-1.16500 zone has the potential to reach the 1.18000 zone.
This will record the price's most recent high for a 10-week trading period.
