Investors saw signs of a change in price direction on the chart of the GBP/USD currency pair on Tuesday yesterday after 7 days of bearish patterns.
After the end of last week continued into the beginning of this week the pace of decline slowed down, the price started to show a surge in trading in the New York session yesterday.
No strong factors are seen to support the strengthening of the Pound where the price increase is more driven by the gloom of the US dollar currency which has previously strengthened.
The current market sentiment that is recovering is a factor limiting the strengthening of the US dollar with the news from China that it is reported that it will implement economic stimulus measures.
In addition, the positive earnings reports of the world's giant companies and the increased projections by the IMF on global growth also support the current risk-on sentiment factor.
If observed on the GBP/USD chart yesterday, the price has managed to increase to reach the level of 1.29000 which again becomes a resistance for the price.
The rise that has crossed the Moving Average 50 (MA50) barrier on the 1-hour time frame of the GBP/USD chart also triggered the initial signal of a change to a bullish trend.
If the price increase continues today past 1.29000, the price will continue to rise towards the concentration level of 1.30000 with the price reaction around that will be observed.
A higher move could reach back to the 1.31000 level which was the price plunge zone starting last week.
However, if the price starts to turn to the downside again, the price is likely to break past the MA50 support and test the current support level at 1.28000.
Further declines are expected to reach the concentration level in early July trading at 1.27000.
The clear direction of price movement will be known after the results of the FOMC meeting early this morning.
