The price chart of the GBP/USD currency pair clearly displayed a bearish movement on Tuesday's trading yesterday with a daily decline of around 100 pips recorded.
The UK employment data report in yesterday's European session was mixed and failed to support the strengthening of the Pound.
On the other hand, the US dollar managed to show strengthening yesterday following the signal of the postponement of interest rate cuts by the Federal Reserve (Fed) through a speech delivered by Fed governor Christopher Waller.
In addition, the geopolitical tension factor in the Middle East also influenced the strengthening of the US dollar as a safe-haven currency this week.
Today's focus will be on the UK inflation data in the European session shortly and in the New York session, the US retail sales data will steal the attention of investors.
On the GBP/USD chart, the price opened around the 1.09500 level in the Asian session yesterday and then continued to make a continuous decline in the following sessions.
When observed, the price drop has managed to pass the 1.27000 level which has been a support for the price throughout the last week and is thick from being broken.
After the level was seen to fail to withstand downward pressure, a bearish pattern was displayed until the price headed towards the target zone of 1.26000.
Prices remained hovering slowly above the zone when trading continued in the Asian session this morning with the expectation that the decline will continue.
If the 1.26000 zone is broken, the price target will shift to 1.25000 after the last time the price tested it previously on December 13th.
However, price increases can occur if the latest published economic data influences the price direction.
If the price increase happens, the 1.27000 level is seen to function as a price resistance.
If it passes then it will give a bullish signal for the price to display a higher increase up to the target of the 1.28000 resistance zone.
