While investors monitor developments in the UK to be wary of the Pound's currency movements this week, the US dollar first stole the show with a strengthening display in the New York session yesterday.
What tickled the currency king to rampage again in the market?
Hawkish comments by several members of the Federal Reserve (Fed) came into focus earlier this week to dampen expectations of a previous easing of policy tightening.
In addition, the situation in China worsened after the tension related to the spread of Covid-19 escalated and later triggered protests by the people of the country that lasted for several days.
The risk-off market sentiment again gives an advantage to safe-haven currencies including the US dollar.
The price chart of the GBP/USD currency pair failed to continue the bullish pattern of last week after ending flat at the end of the week.
The situation that started to change at the beginning of this week saw the price have made a decline of around 170 pips after initially testing the resistance level at 1.21000.
After a decline to the 1.19400 level at the end of the New York session, prices rebounded to resume trading in the Asian session this morning (Tuesday) testing the 1.2000 concentration zone.
However, the price is seen to be still below the Moving Average 50 (MA50) barrier level on the 1-hour time frame on the GBP/USD chart, indicating that the downward trend is likely to continue.
If the decline continues again past the current support level at 1.19400, the price is expected to head towards the 1.18000 zone which was the focus tested several times before.
A further drop past that important zone will push the price to around 1.16000 anyway.
But, should the price make a resurgence higher beyond the 1.2000 zone, yesterday's resistance at 1.21000 will be the target to be tested again.
After passing that resistance, the price is expected to record the latest 3-month high to continue the bullish trend.
