The price movement on the chart of the GBP/USD currency pair was seen to move more horizontally at the opening of the week as both the Pound and the US dollar were driven by the monetary policy projections of their respective central banks.
The Federal Reserve (Fed) is seen to be under pressure to lower interest rates at its September meeting after the NFP jobs report published last week recorded a declining reading for July.
Meanwhile, the Bank of England (BOE) last week initiated its first interest rate cut which is seen to put pressure on the Pound.
There was a price drop on the GBP/USD chart yesterday, but the price rebounded when approaching the 1.27000 zone, which is seen as an important support for the price.
The decline did not continue as the US dollar also moved lower in the market prompting a rebound with the price returning to around 1.28000.
Although the price movement is still in a bearish trend, the price moving above the Moving Average 50 (MA50) line on the 1-hour time frame on the chart gives an early signal for the start of a bullish trend.
If the price manages to break out of the 1.28000 zone, the next move higher will be towards around 1.29000 to test the resistance.
If it breaks higher, the price increase can reach up to 1.30000 after showing more clear bullish movement signals.
On the other hand, if the price is pressured to fall, the 1.27000 support zone becomes a critical area that will be observed to determine the future direction of the price.
If the zone fails to bounce, a lower drop that breaks through the support will push the price to record a new 5-week low with the target moving to 1.26000.
