The price chart of the GBP/USD currency pair changed direction as the market reacted to a different tone of signals by Federal Reserve (Fed) Chairman Jerome Powell on monetary policy.
At the beginning of the week, the price showed a decline from the high level of 1.28400 that had been reached and signaled a change in the bearish trend.
However, the price direction changed again after Powell signaled that the central bank is getting closer to implementing interest rate cuts, but it is necessary to first assess the situation of declining inflation.
The US dollar weakened again giving room for the Pound to breathe again. In the European session, UK economic growth data will be watched to drive the movement of the Pound.
Then, investors will look forward to indications on the United States (US) inflation data that will be published in the New York session later tonight.
The downside on the GBP/USD chart saw price test the concentration zone at 1.28000 but failed to extend the decline lower.
On the other hand, the price bounced back above the Moving Average barrier line (MA50) on the 1-hour time frame on the chart, indicating a change in the bullish trend again.
The increase in prices continued until the end of the New York session, and continued trading at the opening of the Asian session, prices were seen to continue to rise again but at a slower pace.
The latest high level was recorded around 1.28600 which was seen challenging the trading record last June.
If the rally continues beyond that, the price will set a new high for the 4-month trading period with a target at 1.29000.
On the other hand if the price retracement occurs, the 1.28000 zone is seen as the nearest support zone of the price with a reaction around that will be observed.
Plunging lower indicates a bearish movement for the price with the target of the decline being at the 1.27000 zone again.
