On the 4-hour chart, we can see a GAP at 1.1584 between the closing price of Friday and the opening price this week. GBP/USD is currently trading at 1.1683, after having reached a high at 1.1709 in the American session on Monday.
The CPI figures for August in the United States will be published in the American session. A decrease of 0.1% in the monthly reading and a drop in the annual rate of 8.5% to 8.1% are expected.
In case the actua data goes against the consensus, it could favor the US dollar and thus, the British pound could fall until it closes the gap it left at 1.1584. GBP/USD could even reach the psychological level of 1.1500.
On the 4-hour chart, the eagle indicator is positioned around the overbought zone, above 90 points. The GBP/USD pair rose above the 21 SMA, reflecting the bullish bias.
The pound could find strong resistance at the 0/8 Murray zone located at 1.1718. Above that level, 1.1805 appears as the next upside target. A strong technical correction could occur around this level as oversold levels are identified.
On the 4-hour chart, we can see that the pound is moving within an uptrend channel which has been underway since September 6th. In case there is a technical correction, it will be a good opportunity to buy around 1.1580. This level coincides with the 21 SMA and the bottom of the uptrend channel.
On the contrary, if there is a pullback towards 1.1805 (200 EMA), it will be a good opportunity to sell, with targets at 1.1718 (0/8 Murray) and at 1.15 80. GBP is expected to fall in the next few hours and cover the gap it left at 1.1584.