A daily increase of around 100 pips was recorded on the chart of the GBP/USD currency pair yesterday following the continued decline of the US dollar.
Significantly the US dollar weakened in the New York session yesterday, the United States (US) consumer confidence data published with positive figures increased failed to provide support.
This is due to the market focusing on dovish statements by Federal Reserve (Fed) governor Christopher Waller who sees the need for the central bank to lower interest rates in the coming months.
When the hawkish Waller began to give such a view, the market saw additional factors supporting the tendency for the Fed to move further towards an easing phase, at the same time keeping the US dollar weak.
The pound took advantage of this opportunity to push its value to a new 3-month high.
Examining the GBP/USD chart, the price hovering above the 1.26000 level has surged to the focus target level of 1.27000 in the New York session.
However, the price showed a reaction to test the resistance and flattened around it until the trading session ended.
The price movement remains above the Moving Average 50 (MA50) support level on the 1-hour time frame on the GBP/USD chart which suggests the trend is still bullish.
The price hovered slowly above 1.27000 in the Asian session this morning (Wednesday), with the expectation that the increase will continue to the latest high level.
The price's next target is seen to be at the 1.28000 zone which is likely to be the latest resistance zone to be tested.
If there is no change in the current market situation and the movement pattern of the US dollar, price increases will continue to be expected.
However, if the situation changes in the market, the price decline is likely to be shown again after the price plunges from the height of 1.27000.
The drop in price will go to the 1.26000 level before the continuation of the more severe fall will reach around 1.25000.
