Early in the European session, the British pound (GBP/USD) is trading around 1.1882 above the 21 SMA and within a symmetrical triangle formed since November 11.
The British pound is receiving support on expectations that the Bank of England will continue to raise borrowing costs to combat persistent inflation. This in turn provides some strength to the pair, although the gloomy outlook for the UK economy could limit gains.
On the 4-hour chart, we can see that the pound is touching the top of the bearish channel of the triangle pattern. With a sharp break above this resistance line, we could expect an acceleration to +1/8 Murray at 1.1962 and the pair could even reach the psychological level of 1.20.
The symmetrical triangle pattern could offer a clear signal for a decisive move in the coming days. If the British pound breaks below 1.1780, we could expect a drop towards the 8/8 Murray located at 1.1718. The price could even reach the area of 200 EMA located at 1.1568.
Meanwhile, GBP/USD is expected to trade within this symmetrical triangle and may move within a range of 1.1901 -1.1790.
In case the British pound trades above 1.1963, we could expect a quick rise towards +2/8 Murray located at 1.2207.
Our trading plan for the next few hours is to sell the British pound below 1.1862 (21 SMA) with targets at 1.1790. In case of a break below 1.1780, we could continue selling with targets at 1.1718 (8/8 Murray) and 1.1568 (200 EMA).