The chart of the GBP/USD currency pair shows that the bullish pattern continued on Tuesday's trade.
Is the Pound really strong?
If the central bank policy factor is examined, the Bank of England (BOE) has previously signaled to stop monetary policy tightening. This is seen to further encourage the depreciation of the Pound currency.
However, the biggest challenge faced by the BOE is to 'tame' inflation which is still at a high level. Interest rates still need to be increased?
In a speech by BOE Governor Andrew Bailey yesterday regarding the banking crisis, the UK economy was said not to be affected by the crisis but would continue to monitor the situation.
So, the factor that is seen to affect the price increase on the GBP/USD chart is more driven by the depreciation that occurs on the US dollar.
The pull towards the US dollar is fading while the outlook for the Federal Reserve's (Fed) monetary policy remains unchanged, expecting the tightening phase to end following the ongoing crisis.
The price increase that continued on Tuesday yesterday has passed the 1.23000 level and reached a height of around 1.23500.
The horizontal price movement at that height continued today's trading (Tuesday) which was seen trying to overcome the height reached last week.
Bullish movement is still expected with the price still moving above the Moving Average 50 (MA50) support level on the 1-hour time frame on the GBP/USD chart.
The continued rise is expected to record a new high towards 1.24000.
That high was an important resistance zone that was tested throughout January's trading.
Beware if the price starts to decline again after failing to continue the rising pattern.
A break below the 1.23000 level and breaking through the MA50 support will be an early signal for a price trend change to begin.
Next, the price is seen to go down and test the RBS zone (resistance become support) at 1.22000.
