The price jumped up to 130 pips after hitting the latest 6-week low on the chart of the GBP/USD currency pair in trading sessions at the end of last week.
Does this signal a bullish trend change? Or just a price correction that happened driven by profit taking activities at the weekend?
Investors still expect the US dollar to continue strengthening this week, which is likely to add more pressure to the Pound.
A weekly decline of around 350 pips occurred last week, and it is not impossible that the same or greater decline will be exhibited this week.
Last week's lows reached around 1.19150 before the price rebounded in the New York session last Friday past the 1.20000 zone reaching a high of around 1.20500 at the end of the session.
Continuing the opening of trading earlier this week, the price dropped slightly from the closing level and hovered in the 1.2000 zone in the Asian session.
Also being above the Moving Average 50 (MA50) level on the 1-hour time frame on the GBP/USD chart is an early signal for a bullish movement after the price managed to jump above it last week.
The increase if successful continues is seen to lead to the level of 1.21000. After successfully breaking through, the rise will continue to the 1.22000 concentration zone.
However, if the US dollar remains strong and pushes the price down, the 1.19000 zone is seen to be the focus to be tested this week.
If the zone fails to hold the price lower, the 1.18000 level is seen waiting to be hit by the price.
