The GBP/USD currency pair chart showed significant volatility after the United States (US) inflation data was published in the New York session yesterday.
Before that, the price moved slowly leveling off at around 1.24500 in previous sessions.
However, after the data was published, there was a significant movement with a plunge reflected in the initial reaction.
The US Consumer Price Index (CPI) has shown an increase in the annual inflation reading in January 2025 when the market expected the figure to remain the same as before.
This has given a strengthening reaction to the US dollar, seeing the price plunge to penetrate the 1.24000 level.
However, after testing the zone as well as the Moving Average 50 (MA50) support line on the 1-hour timeframe on the GBP/USD chart, the price has bounced back up towards the end of the New York session.
The price increase reached 1.24800 before retreating slightly to close the session at around 1.24400.
Trading that continued in the Asian session today (Thursday) saw the price increase continue towards the 1.25000 level.
If the price continues in the following sessions beyond that level, the high of 1.25500 reached last week is likely to be challenged again.
Next, the price will record a new high with the target moving to 1.26000.
However, if the price fails to maintain the upward pattern, the decline may occur again.
The 1.24000 level is likely to be tracked by the price again before further decline signals are observed.
For the target to a lower level, 1.23000 is seen as the next price focus.
