Early in the European session, the British pound is trading at around 1.1667, it is bouncing after the sharp fall to the low of 25 March at 1.1620.
According to the 4-hour chart, we can see that the British pound is trading below the 21 SMA and below the 0/8 Murray (1.1718).
Since early August, the British pound has been moving within a downtrend channel and the top of this channel is likely to act as a barrier at around 1.1772.
Since August 22, the eagle indicator is showing a positive signal. However, the pound could have a technical rebound in the next few hours towards the 21 SMA located at 1.1725.
The growing likelihood that the Federal Reserve will continue to tighten its monetary policy makes investors consider the US dollar as a safe haven. This is a factor that keeps the GBP/USD pair under strong downward pressure. Investors are pricing in a 0.75% interest rate hike at the next monetary policy meeting in September.
The market sentiment report is showing that there are 80.23% of traders who are buying the pair. This is a positive sign for the pound as a technical rebound could occur in the next few hours and then the trading instrument will resume its main downtrend.
In case the British pound breaks 0/8 Murray (1.1718) and the 21 SMA located at 1.1725, it could be a positive sign for the pound but we should expect a consolidation above 1.1780.
On the other hand, if the British pound resumes its bearish cycle, we could expect a technical bounce around -1/8 Murray located at 1.1596.
Our trading plan for the next few hours is to wait for a pullback at 1.1725 to sell, with targets at 1.1596. On the other hand, we could expect a technical bounce at around 1.1596 to buy, with targets at 1.1718 and 1.1775.