The price volatility on the chart of the GBP/USD currency pair makes investors anxious to watch it, but the risks are known in advance.
This is because both central banks, the Federal Reserve (Fed) and the Bank of England (BOE) held their latest policy meetings and announced their respective interest rates to be kept on hold.
The Fed was dovish with a forecast of 3 interest rate cuts for 2024, while there was no change in the follow-up statement by the BOE which remained cautious.
Investors watched for drastic price volatility on the GBP/USD chart yesterday Thursday.
After the FOMC meeting which saw the US dollar significantly weaken, the price has made a jump above the 1.27000 level until around 100 pips reaching the 1.28000 zone.
However, the 1.28000 zone remained a resistance that failed to be passed before the price began to decline in the European session.
The surprise interest rate cut initiated by the Swiss National Bank (SNB) yesterday triggered panic and made the US dollar as a safe-haven currency regain demand and strengthen again.
The price drop continued until the New York session continued the bearish movement after the BOE meeting was focused on.
The price reached the level of 1.26500 recording a daily decline of 150 pips and a bearish signal with movement below the Moving Average 50 (MA50) barrier on the 1-hour time frame of the chart.
With the observed momentum, the price is likely to continue the decline lower at the end of the week to test the concentration level at 1.26000.
But if the price increase happens, the nearest resistance is at 1.27000 to be overcome again before the price will try to climb back towards the 1.28000 zone before.
Investors will also focus on UK retail sales data to be published in today's European session which could influence the movement of the Pound.
