The price on the chart of the GBP/USD currency pair has plunged 130 pips last Friday which was somewhat surprising following the unexpected situation that occurred after the United States (US) NFP jobs report was published.
This is a follow-up to the strengthening that took place by the US dollar when the components of the report under review were rather bleak.
Although the increase in employment for August was quite good, the average income recorded a declining figure while it was more worrying when the unemployment rate jumped from 3.5% to 3.8%.
The US dollar briefly weakened as the data was published saw prices on the GBP/USD chart surge first testing the 1.27000 level.
However, the re-strengthening US dollar has plunged the price below the 1.26000 base at the close of the last session of the week.
The 1.27000 level and the Moving Average 50 (MA50) barrier on the 1-hour time frame on the chart are seen to have failed to be crossed and the price is signaling a bearish movement.
Resuming trading at the opening of the week earlier, the price hovered slowly around 1.26000 in the Asian session.
A further decline would be expected based on the previous pattern with the latest target for the price being at the 1.25000 zone.
This would make the latest 12-week record low if prices hit around that.
On the other hand, if the price rises again this week after moving above 1.26000, the MA50 barrier will be tested and also the 1.27000 level will try to be broken.
If the following obstacles are successfully overcome, a further increase in price will be shown to head towards the resistance zone at 1.28000.
