A surprise happened on the chart of the GBP/USD currency pair last Friday when the price has jumped significantly recording a daily increase of up to 200 pips!
The situation is due to the market's reaction to the publication of the United States (US) NFP employment data report which recorded a declining reading leading to a significant depreciation of the US dollar.
All components in the employment report recorded gloomy readings, sparking expectations that the Federal Reserve (Fed) will likely not raise interest rates at its December meeting.
The pound has managed to trade firmly again against the US dollar despite the central bank of England's (BOE) policy meeting on Thursday delivered in a dovish tone and failing to strengthen the pound initially.
If observed, the price on the GBP/USD chart has jumped from the 1.22000 zone, breaking through the 1.23000 resistance and almost touching the 1.24000 level.
The high level reached on last week's surge was around 1.23900 before the price slowly closed trading around that area.
The price movement is expected to be bullish with the price still moving above the support level of the Moving Average 50 (MA50) on the 1-hour time frame on the GBP/USD chart.
If the increase continues, the level of 1.24000 will be passed before the price continues to record the highest level of the latest 8 weeks which will then target the height of 1.25000.
However, if the price decline is displayed again this week, the 1.23000 zone is seen to be the focus to be tested and the price reaction around it will be observed.
A dip lower will give an early warning of a bearish trend change and the price could drop to 1.22000 again.
