The price chart of the GBP/USD currency pair on Monday yesterday started a positive rise in the Asian session and recorded a new 6-month high.
However, the situation changed in the New York session when the strengthening of the US dollar pushed the price down again and changed the current trend pattern.
The price is seen to have reached a height of around 1.23400, but has fallen back below the 1.22000 zone with a daily decline recorded yesterday of around 180 pips!
This price drop situation is driven by the strengthening factor of the US dollar which is supported by the release of survey data of the service sector in the United States (US) with surprising readings.
The survey's latest figure was higher than expectations for a decline as well as the previous month, in contrast to the more gloomy outlook for the manufacturing sector published last week.
Thus, expectations for the Federal Reserve (Fed) to continue policy tightening have rekindled, at the same time supporting the strengthening of the US dollar at this point.
However, market sentiment that recovers with positive developments in China is seen to be able to hinder the progress of the US dollar in the market.
Continuing trading in the Asian session this morning (Tuesday), the price on the GBP/USD chart is seen hovering in the 1.22000 zone with expectations to continue the decline lower.
This is because yesterday's decline in price has dropped below the Moving Average 50 (MA50) barrier on the 1-hour time frame on the chart, which is an early signal of a bearish trend change.
If the decline lower continues, the initial concentration of the price is seen to be at the level of 1.21000 before continuing the decline to the concentration zone of 1.2000.
However, there is no denying that the price has the potential to bounce back and continue the upward trend of the past week.
The price that made an increase from the 1.22000 zone is seen to test the resistance at 1.23000 before overcoming the highs reached yesterday.
Next, the increase continues to a higher target around 1.24000 and will record the latest 6-month high level.
