A daily price jump of around 130 pips was displayed on the chart of the GBP/USD currency pair during yesterday's Tuesday trading.
This has wiped out the gains made earlier in the week when the price surge was driven by the weakening US dollar.
However, the US dollar 'awakened' again yesterday with the support of the strong United States (US) manufacturing and services PMI data published for October.
Meanwhile, the same data for the UK was published in the previous European session with less encouraging readings.
If observed on the GBP/USD chart yesterday, the price initially made an increase to the height of 1.22850 with the target being to reach 1.23000.
Later, the price plunged 130 pips, re-entering the 1.22000 level and reaching around 1.21600 in the New York session.
The price flattened slowly around that at the end of the session until it continued at the opening of the Asian session this morning (Wednesday).
If the decline continues lower, the target is to retest the previous week's support level at 1.21000.
If that level is also broken, a further price drop is expected to lead to the 1.20500 zone which is the focus of early October trading.
However, if the price surge occurs again and breaks through the 1.22000 level, it is likely that the rising pattern at the beginning of the week will resume.
The price increase will again lead to the 1.23000 level for the price to test the resistance zone.
