The GBP/USD pair surged more than 100 pips in New York trading yesterday following market reactions to President Donald Trump's inauguration at the White House.
Investors remained cautious about Trump's announcement of new administration policies that will affect the entire global market.
The recovering market sentiment had an initial depreciation effect on the US dollar after moving flat since the end of last week.
The flat price movement in the 1.022000 zone on the GBP/USD chart then showed a strong surge to surpass the 1.02300 level.
The 1.02300 level was tested last week, but the price failed to pass it before bouncing back down.
At the end of the New York session, the price reached a new high around 1.23400 for a 2-week record high.
However, trading continued in the Asian session this morning (Tuesday), the price fell back below the 1.23000 zone until it reached the opening of the European session.
With the previous momentum, the price has the potential to jump higher but needs to first surpass the 1.23000 level.
A higher increase above yesterday's level is then expected to lead to the next focus level at 1.24000.
On the other hand, if the price is pushed lower, the previous focus zone of 1.22000 will be approached again.
A lower decline beyond that zone gives a bearish signal for the price to fall to the 1.21000 support.
