The price movement on the chart of the GBP/USD currency pair still maintains a bullish trend, but investors are beginning to be wary of signals for a possible trend change.
This is because the UK inflation report published in the European session yesterday had an impact on the movement of the Pound.
The latest inflation reading decreased by quite a significant difference from the previous level of 3.2% to 2.3% for April, but did not reach the target of 2.1%.
The decline in UK inflation is seen in line with the Bank of England's (BOE) preparations to move towards policy easing at the day-long policy meeting.
The pound strengthened for a while on the published data but then fell back to low again.
While the US dollar gained strength to recover following the details of the minutes of the FOMC meeting scrutinized early this morning which remained hawkish.
On the GBP/USD chart, the price has soared to a recent high of 1.27600 in the European session yesterday before falling back to the 1.27000 level.
The price movement until continuing into the Asian session this morning (Tuesday) is seen hovering above the RBS (resistance become support) zone of 1.27000, in addition to the Moving Average 50 (MA50) line being tested on the movement in the 1-hour time frame on the chart.
If the price still manages to survive to continue the increase, the high level of 1.27600 yesterday has the potential to be overcome.
The price will record the latest high level with the target to reach around the 1.28000 zone.
On the other hand, if the price has started to slide down below the 1.27000 zone, investors will be ready to expect a significant price decline to begin.
The initial target is to reach around 1.26000 as the level that became the focus of the price before.
Today's market focus is on UK and US manufacturing and services PMI data which will drive both the Pound and the US dollar.
