The results of the Bank of England meeting this week will drive the movement of the Pound currency, while the market's focus will also be on the US (US) NFP employment report at the end of the week.
However, pressure began to fall on the Pound at the opening early this week when the US dollar significantly strengthened following the tariff war situation that erupted over the weekend.
US President Donald Trump launched tariffs on Canada, Mexico and China. Shortly after, Canadian Prime Minister Justin Trudeau announced retaliatory tariffs on the US again.
The increased risk in the market gave the US dollar an advantage as a safe-haven currency to strengthen, forming a significant opening price difference on the GBP/USD currency pair chart this morning.
Around 100 pips 'gap' of price difference opened in the Asian session this morning compared to the closing level of the last session last week.
If observed, the price is flat above the 1.24000 zone until the end of the week with an early signal for a bearish movement following the movement below the Moving Average 50 (MA50) resistance line on the 1-hour time frame on the chart.
The price started the Asian session this morning around the 1.23000 level before slowly declining to around 1.22500 with expectations of a lower decline to continue.
If the decline continues, the price is seen heading towards the 1.22000 zone which was the focus zone in mid-January trading.
If continued lower, the 1.21000 support zone will be the target that the price will test.
However, the situation can change based on the market reaction to Trump's actions in implementing the new policy.
If the price manages to jump above the 1.23000 level again, there is the potential for the price to rise back towards the 1.24000 zone which was the price support zone last week.
Passing that important zone will be considered an early signal for a change in the bullish price trend again.
