The price action on the chart of the GBP/USD currency pair on Monday yesterday showed a bearish pattern for the opening of the market earlier this week.
This is followed by the re-strengthening factor of the US dollar in the market which has an advantage during the risky environment due to the development of Covid-19 in China.
Beijing and Guangzhou have already started reporting deaths due to Covid-19 infection in addition to increasing cases of infection.
The Pound Sterling has continued to fail to strengthen over the past week despite UK inflation rising to a 41-year high.
With the expectation of the US dollar potentially strengthening again, the Pound will trade more depressed this week.
If examined, the price on the GBP/USD chart yesterday showed a daily decline of around 110 pips with the decline starting from the Asian session continuing to the European session to the 1.18000 support zone.
However, the price started to level off in the New York session and bounced slightly at the end of the session from the 1.18000.
The rise continued in the Asian session this Tuesday morning testing the Moving Average 50 (MA50) barrier on the 1-hour time frame on the GBP/USD chart for investors to assess for indications of any change in the price trend.
If the price reverses to make another decline, the 1.18000 zone will still be tested, which has been a price support zone since last week.
If it is broken, the price will continue to decline with the expectation to reach the RBS (resistance becomes support) zone at 1.16000.
However, if the price manages to maintain the increase until the following sessions, passing the 1.19000 zone will see the price retest the 1.20000 resistance zone reached last week when the price recorded a 13-week high.
