Final answer:
When two hydrogen atoms begin to interact and form a bond, the attractive force between them becomes stronger and the potential energy decreases until it reaches the lowest point. At this point, the repulsive force between the nuclei starts to dominate, causing the potential energy to increase.
Step-by-step explanation:
As the atoms first begin to interact, the attractive force is stronger than the repulsive force and so the potential energy of the system decreases.
As the two hydrogen atoms move closer and closer together, the potential energy is at its lowest possible point. If the hydrogen atoms move any closer together, a third interaction begins to dominate, and that is the repulsive force between the two positively-charged nuclei. This repulsive force is very strong, as can be seen by the sharp rise in energy at the far left of the diagram.