The pound failed to recover earlier this week as the US dollar's re-strengthening in the market added pressure to almost all major currencies.
The risk of a 'government shutdown' that is subsiding is also giving a positive boost to the current movement of the US dollar at the opening of October.
With expectations for the Federal Reserve (Fed) to further tighten their monetary policy after this, the United States (US) NFP employment data report at the end of this week will be an important indicator.
With that situation, the Pound is expected to continue to experience further depreciation if there is no change in the current development of the market.
If you look at the price movement on the chart of the GBP/USD currency pair yesterday, the attempt to increase the price failed to stay above the 1.22000 level.
The price that tested that level then plunged to the end of the New York session breaking through the important level of 1.21000.
After surpassing last week's levels, the price hit a new 7-month low where the price hovered slowly around 1.20700 in the Asian session this morning (Tuesday).
A bearish signal is identified by price movement remaining below the Moving Average 50 (MA50) barrier on the 1-hour time frame on the GBP/USD chart.
The decline lower is expected to continue with the target for the price heading towards around 1.20000.
The last time the price traded at that level was last March.
Even so, investors remain alert to the possibility that the price will change direction to rise again.
A move above 1.21000 again would expect price to retest resistance at 1.22000 as at the beginning of the week yesterday.
Next, the continued rise will try to overcome the high reached last week at 1.22700 before targeting the 1.23000 resistance zone.
