Trader Pound is preparing for a fall in the value of the currency as more and more signs appear on the chart of the GBP/USD pair which has been in focus since the beginning of the week.
The market is waiting for a change in the price trend to happen after the central bank of England (BOE) at the day-long meeting has signaled to start cutting interest rates in June.
Last Wednesday, UK inflation showed a significant difference in the number of declines even though it did not reach the target. This is seen in line with the policy easing plan by the BOE.
However, the price movement on the GBP/USD chart is seen to be still holding above the 1.27000 level since the beginning of this week until a clearer sign appeared yesterday for a change in trend.
With the restrengthening of the US dollar driven by the published readings of the United States (US) economic data, the price is seen starting to drop below the important level of 1.27000.
The price is also now moving below the barrier line of the Moving Average 50 (MA50) on the 1-hour time frame on the chart, signaling a bearish trend.
Throughout the Asian session today (Friday), prices moved flat and slow below the 1.27000 level and showed signs of falling lower as UK retail sales data for April published earlier in the European session showed a worse-than-expected contraction.
But investors are also likely to look forward to the movement of the US dollar in the New York session later tonight which will be driven by published data such as the US consumer confidence survey and durable goods order data.
If the price plunges from the 1.27000 level, the target is to reach the next concentration zone at 1.26000.
If it still breaks down, the bearish trend continues with the target moving to 1.25000.
However, if the price is successfully lifted back above 1.27000, there is still potential for the previous bullish pattern to continue.
The high level of 1.27600 reached last Wednesday will try to be overcome for the price to record the latest high level towards the 1.28000 zone.
