A bearish pattern was exhibited in yesterday's Tuesday trading on the chart of the GBP/USD currency pair after the flat movement exhibited the previous day.
The Pound currency continued to trade gloomy as markets cautiously awaited the outcome of the Bank of England's (BOE) policy meeting.
However, the Pound has the potential to strengthen following expectations for the BOE to continue their monetary policy tightening.
The increase in interest rates is expected to be increased by 25 basis points. There is also an expectation for an increase of 50 basis points.
The daily decline on the GBP/USD chart yesterday was around 90 pips reaching the 1.27400 level after breaking through last week's lows.
The decline also simultaneously recorded the latest 4-week low.
The price that rebounded at the close of the New York session then hovered below the 1.28000 level in the Asian session this morning (Wednesday) and the price also moved below the Moving Average 50 (MA50) barrier giving a bearish signal.
The price drop if it continues lower will reach the level of 1.27000 to record the latest low.
If that level is also penetrated, the price can reach up to around 1.26000 which is also the price concentration level before.
On the other hand if there is a rebound, the price is likely to cross the MA50 barrier before signaling a bullish trend change.
The continued increase will test the resistance at the 1.29000 level before the continued successful increase will return to last week's resistance of the 1.30000.
