A surprise for Pound investors yesterday, the price movement pattern that was displayed earlier has started to change following the return of the strengthening of the currency king, the US dollar.
It can be observed on the chart of the GBP/USD currency pair, last week's price increase which continued at the beginning of this week started to signal a change of direction on Tuesday yesterday.
This is because the price has displayed a daily drop of around 100 pips!
Initially, the increase was displayed first in the Asian session reaching a height of around 1.27450 before the price decrease began to be papered in the European session and continued into the New York session.
The price plunged past the 1.27000 level before reaching around 1.26500 in the New York session before rebounding slightly to close trading around 1.26800.
The price is slowly hovering below the 1.27000 zone in the Asian session this morning (Wednesday) in addition to giving a bearish signal where the price is also seen to be below the Moving Average 50 (MA50) barrier on the 1-hour timeframe on the GBP/USD chart.
If the price fails to break above 1.27000, the decline could happen again to resume yesterday's pattern.
Exceeding the price level in the New York session yesterday will push the price towards the 1.26000 support tested last week.
However, if the price manages to jump above 1.27000 and also the MA50 barrier, this will be a bullish signal for the price to resume the previous upward pattern.
Overcoming the highs reached yesterday, further gains are likely to be seen with the price target heading towards the 1.28000 resistance zone.
