The price chart of the GBP/USD currency pair saw a daily plunge of almost 200 pips on Wednesday yesterday as the US dollar traded strong and the Pound declined after key data was published.
Focusing on yesterday's European session, the published UK annual inflation reading showed a lower-than-expected decline to 10.1% versus 10.3%, from the previous reading of 10.5%.
The decline in inflation could support previous indications that the central bank of England (BOE) will stop monetary policy tightening measures.
However, it should be noted that even though the inflation rate has decreased, it is still at a level that is too high.
The pound fell in the European session until it continued to the New York session while the US dollar was strong supported by the release of encouraging United States (US) retail sales data.
The price is seen to have jumped past the 1.21000 level and towards the expected zone of 1.20000 before slightly bouncing from the zone.
Continuing trading in the Asian session this morning (Thursday), the price slowed around 1.20400 and is seen to be still below the Moving Average 50 (MA50) barrier level on the 1-hour time frame which shows a bearish signal.
With the plunge displayed yesterday, the price is likely to continue its decline below the 1.20000 zone.
Among the focus levels on further declines are seen at 1.19400 or 1.18800 for prices to record recent lows.
However, if there is a rebound in prices towards the end of the week, the initial resistance at 1.21000 is seen to be tested first.
Next, the price that succeeded in continuing to rise will head towards the resistance zone of 1.22000 before challenging the height reached last Tuesday around 1.22700.
