There was a price bounce of around 100 pips on the GBP/USD currency pair chart at the end of last week when the price had previously fallen to its latest 7-month low.
If observed, the price still shows a bearish trend with a significant price drop occurring during the market reaction to the FOMC meeting results which saw the strengthening of the US dollar.
Next, the Bank of England (BOE) signaled to continue moving on the path of easing its policy after maintaining interest rates at the last meeting of 2024.
Investors saw the price decline sink below the 1.25000 zone which marked the lowest level since May trading.
However, on Friday, the price which was slowly hovering around 1.25000 then managed to jump up to reach the 1.26000 level at the end of the final session before closing the trading of the week.
The weakening US dollar lifted the price up again despite the disappointing UK retail sales data published on Friday.
Price movement remained slow below the 1.26000 zone at the opening early this week, but the price is now above the Moving Average 50 (MA50) support line, giving an early signal for an upward movement.
For this to happen, the price must first break through the resistance at 1.26000 before continuing the closing pattern of last week.
The continued price increase is seen to be heading towards around 1.27000, which is the zone that was the focus last week before the plunge occurred during the FOMC meeting.
Meanwhile, for the expectation of a price decline after failing to break through 1.26000, it is likely that the price will return to approaching the 1.25000 zone which is seen as support during the price creation.
A decrease lower will record a new low with the target shifting to 1.24000.
