The price chart of the GBP/USD currency pair showed a flat movement on Tuesday yesterday as the market focused on the release of the United States (US) inflation data for February.
The US annual inflation rate fell to the expected figure, reinforcing expectations that a 50 basis point increase in interest rates will be difficult to implement by the Federal Reserve (Fed) at its March meeting.
Although the momentum has started to fade, the US dollar is still seen trading weakly, leaving room for the Pound to continue strengthening in this still turbulent market environment.
The focus shifts to tonight's US producer price index (PPI) data release which is seen to continue to drive the movement of the US dollar.
On the GBP/USD chart, prices were flat below the 1.22000 resistance level throughout the day yesterday after a 150 pips jump earlier in the week to reach that level.
However, the price that is still moving above the support level of the Moving Average 50 (MA50) on the 1-hour time frame on the GBP/USD chart still signals for the bullish trend to continue.
The upside needs to break through the 1.22000 resistance to continue climbing higher and record a fresh 6-week high.
The target for the continued increase is towards a height of around 1.23000, which was previously the price focus level in January trading.
Meanwhile, if the 1.22000 resistance fails to be broken and the price starts to move down below the MA50 support level, investors will be alert for a change in the direction of the trend.
The 1.21000 level is about to be tested again before the price that continues to decline lower is seen to return to the 1.20000 zone.
