After the GBP/USD currency pair opened 100 pips lower in the first session to start the week, the price then showed a daily gain of around 200 pips.
The direction of price movement expected by analysts began to change along with developments in the tariff war issue that is driving the market.
Last weekend, the situation was tense following the announcement of President Donald Trump's tariffs on Canada, Mexico and China.
Canada continued to announce retaliatory tariffs of the same amount, 25% on the United States (US) before on Monday Trump agreed to delay the implementation of the tariffs for 30 days.
The risk-off atmosphere that has subsided has caused the US dollar to move weaker again, especially in the European and New York sessions yesterday.
The pound took the opportunity to recover back to last week's trading levels after starting trading lower earlier this week.
On the GBP/USD chart, the price opened around 1.23000 and fell to around 1.22500 before climbing back above the 1.23000 level.
Continuing into the New York session, the price managed to regain last week's focus zone at around 1.24000 and closed the session at around 1.24500.
The slow decline in price approached the 1.24000 zone at the beginning of the European session, but the price hovering above the Moving Average 50 (MA50) support line on the 1-hour time frame on the chart still signals a bullish move.
If the price continues its climb again, the resistance is at the 1.25000 level to be retested as in last week's trading.
Breaking through that resistance will push the price to record a new 5-week high towards the target at 1.26000.
However, if the price drops back below the 1.24000 zone and breaks through the MA50 support, investors are likely to see a resumption of the price decline.
The target is close to the 1.23000 zone or lower than the level reached in the Asian session yesterday.
