A significant price jump occurred on the chart of the GBP/USD currency pair at the beginning of yesterday's New York session as a reaction to the published United States (US) inflation data.
Following the reading of annual inflation slightly lower than expected to remain at the previous level, the US dollar has weakened as the market sees the tendency for the Federal Reserve (Fed) to implement interest rate cuts.
However, the US dollar recovered after the FOMC meeting that followed early this morning gave the impression that the Fed would maintain a tight policy ready for a longer period after interest rates are maintained.
On the GBP/USD chart, prices surged earlier in the session to break above the 1.28000 resistance zone and hit a recent 13-week high.
The price reached a recent high around 1.28600 before retreating back down to the 1.28000 zone after the market digested the statement delivered by Fed Chairman Jerome Powell.
The bearish pattern continues to continue trading in the Asian session this morning (Thursday) to around 1.27800 but the price is seen to be still above the Moving Average 50 (MA50) support line on the 1-hour time frame on the GBP/USD chart.
If the price drops below the support level, it will be a bearish signal for the price to continue its decline to a lower level.
The target is to re-approach the 1.27000 level which has been an important support zone for the price for the past few weeks.
However, if the price bounces back up, the resistance at 1.28000 will need to be breached once again before the move higher can continue.
Overcoming the level reached yesterday will set a new record with the next target being at the height of 1.29000.
