Drastic price movements occurred on the chart of the GBP/USD currency pair yesterday as expected as the market focused on the main event of the week, the September 2024 edition of the FOMC meeting.
The most important meeting of the year finally gave the answer that investors were waiting for, namely the cut of interest rates by 50 basis points by the Federal Reserve (Fed) to 5.00%.
The pound moved well in the European session when the UK inflation data was published with figures that matched the market, but the price movement situation became uncertain in the following session.
As soon as the FOMC decision was announced, the US dollar weakened significantly, pushing the price up to a height of around 1.33000.
However, after the follow-up conference chaired by Jerome Powell ended, prices were seen to plunge again with the US dollar recovering towards the end of the trading session.
Today's market focus will be on the outcome of the Bank of England (BOE) policy meeting at 7pm, local time.
The price plunged past the 1.32000 level and in the Asian session this morning (Thursday), the decline continued to approach 1.31500 before bouncing back to around 1.32000.
A price drop is still expected to occur if the price remains hovering below the Moving Average 50 (MA50) barrier line on the 1-hour time frame on the GBP/USD chart.
If it continues lower, the price is seen to be heading around 1.31000 and if it breaks lower down, last week's support zone at 1.3000 will be tested again.
But if instead the price starts to rise strongly, the resistance at 1.33000 will try to be overcome for the price to record the level of the latest high.
A higher increase has the potential to reach up to the 1.34000 level.
