A significant jump in price occurred on the chart of the GBP/USD currency pair on Wednesday's trading yesterday following the US dollar's weak movement again.
This is due to the market focusing on the speech by Federal Reserve (Fed) Chairman Jerome Powell who reiterated his previous dovish tone regarding monetary policy.
The policy tightening cycle is seen to be at an end and members of the FOMC meeting also agreed for the central bank to move towards policy easing after this.
Although the data published in the New York session yesterday seemed to support the US dollar, the currency experienced a decline following Powell's statement.
Thus, observed on the GBP/USD chart a jump of almost 100 pips which has penetrated the important level at 1.26000.
At the beginning of the week the price made a drop to around 1.25400 before the price recovered from the latest 7-week low it hit.
An early signal for a bullish trend change was observed with a slow movement of the price above the Moving Average 50 (MA50) support line on the 1-hour time frame on the GBP/USD chart.
Then a surge occurred in the New York session with the height of the price reached at the end of the session around 1.26500.
The price remained flat at that height until the trading session of Asia today (Thursday) with the expectation that higher increases will continue in the following sessions.
A rise in price is seen to test resistance at the 1.27000 zone and price reaction will be assessed for further movement signals.
If it breaks through strongly, the price increase will continue for the target that moves to the 1.28000 zone.
However, if there is no increase, instead the price goes back down again, the level of 1.26000 will be tested and is likely to be able to be a support when making the price.
If the price drops below that level, the previous bearish price movement will continue with this week's lowest level of 1.25400 able to be reached again.
