A bearish pattern started to appear on the chart of the GBP/USD currency pair at the end of last week.
The situation occurred when the US dollar currency traded strongly again at the end of last week's sessions, reducing some of the losses that had previously been experienced.
Analysts saw profit taking activity at the end of the week in addition to the United States (US) manufacturing and services PMI data which was published positively also supporting the US dollar to strengthen again.
While similar data readings in the UK were published mixed, also affecting the depreciation of the Pound.
However, the strengthening situation of the US dollar is expected to be only temporary following the banking crisis that has spread to Germany, which is seen to continue to put pressure on the US dollar.
If observed, the price that hovered at the height of 1.23400 last Thursday began to make a decline below the 1.23000 level to resume trading on Friday.
After giving an initial signal that the price was below the Moving Average 50 (MA50) level on the 1-hour time frame on the GBP/USD chart, the price has declined to the 1.22000 concentration zone.
As expected, the attractive price reaction will be exhibited after the RBS (resistance become support) zone of 1.22000 is tested.
The price has bounced back before closing the week's last trading session around 1.22300.
If at the beginning of this week the price continues to decline lower and penetrates the RBS 1.22000 zone, it will be a bearish signal for the price to continue its decline towards around 1.21000.
If the decline continues, the 1.2000 zone will be the next price target.
On the other hand, if the price manages to make an increase again this week, crossing the MA50 barrier level and the 1.23000 level will be an early signal for the price to continue the bullish movement.
A move higher will overcome last week's high before targeting 1.24000 to record a fresh 8-week high.
