The chart of the GBP/USD currency pair managed to display a bullish movement pattern until the end of last week's trading due to the continued depreciation of the US dollar.
The effect of the United States (US) inflation data reading that is decreasing has increased expectations for the Federal Reserve (Fed) to implement interest rate cuts in September.
The pound showed a strengthening last week when UK economic growth data was published.
Several UK economic data will be watched this week including inflation, employment and retail sales data.
If observed on the GBP/USD chart, the price that passed the 1.29000 level last week has surged up almost touching the 1.3000 level at the close of the last session.
However, the price opened lower again at the beginning of this week with a horizontal price movement around the 1.29600 level.
Still above the Moving Average 50 (MA50) support line on the 1-hour timeframe on the GBP/USD chart, signaling that the price is still moving in a bullish trend.
If the uptrend continues, the price is expected to break through the 1.30000 resistance before advancing higher towards the next target at 1.31000.
However, if the situation does not support a rise to happen, be aware of the risk of a further fall in prices after reaching a 12-month high.
The drop in price is seen to stop and test the 1.29000 level before falling further and the price will reach around 1.28000 again.
