The price chart of the GBP/USD currency pair returned to close trading at the end of last week low again after successfully recording the latest 4-month high.
A significant surge was exhibited from the lows of 1.25000 until the price reached the highs of 1.27900 which was driven by the FOMC meeting prompting a significant depreciation of the US dollar.
The pound managed to keep strengthening despite the central bank of England (BOE) keeping interest rates on hold for the last meeting of 2023 last week.
On Friday, manufacturing and services PMI data for the UK and the United States (US) were published with mixed figures for both sectors.
The pound is back on the decline while the US dollar recovers supported by Fed William's statement on the central bank's monetary policy.
The price has dropped more than 100 pips back to below the 1.27000 level before the price that resumed trading earlier this week is seen to remain hovering below that level.
However, price movement below the Moving Average 50 (MA50) barrier line on the 1-hour timeframe on the GBP/USD chart suggests a bearish signal.
If the decline lower continues earlier this week, the target for the price is towards around 1.26000.
Penetrating lower, the 1.25000 support level will wait to be tested again after the price approaches that area last week before a significant jump occurs.
On the other hand, if the price shows an increase again, crossing the 1.27000 level and the MA50 barrier will be an indication for the price to resume the bullish movement of last week.
The 1.28000 zone that is almost reached will return to be the target resistance for the next price test.
Several data will be in focus this week that can affect the movement of the Pound and the US dollar such as UK inflation data as well as US economic growth data and the PCE price index.
