In the past week, a price drop of up to 270 pips occurred on the chart of the GBP/USD currency pair as the US dollar strengthened again, supported by the latest United States (US) inflation data release.
With the increase in inflation figures in March, the forecast for interest rate reduction measures to be implemented by the Federal Reserve (Fed) in the near term is shrinking.
Thus, the expectation that the Fed will maintain a tight monetary policy has supported the US dollar to strengthen plus the Iran-Israeli war tension factor that is heating up this week will give an advantage to the safe-haven currency.
It can be seen last week on the GBP/USD chart that the price reached a high of 1.27000 and plunged after failing to break through that resistance.
The sharp drop in prices on Wednesday continued at the end of the week to pass the 1.25000 zone which is expected to test the price.
But the price has fallen to around 1.24300 for the lowest record for the year and is the lowest level recorded since November last year.
The price movement remains below the Moving Average 50 (MA50) barrier line on the 1-hour timeframe on the GBP/USD chart as a bearish trend signal and is expected to continue its decline lower this week.
The closest target is to test the 1.24000 zone before the lower decline will continue towards around 1.23000.
If there is a price increase again, the 1.25000 zone as a resistance to be tested in addition to the MA50 barrier will try to break through the price.
If successful, it will be an early signal for a change in the bullish trend again in the price before continuing the climb towards 1.26000.
