Early in the American season, the British pound is trading exactly at the 21 SMA located at 1.2216, having reached the top of the downtrend channel which has been underway since early December.
The British pound could be gaining momentum to break above 1.2225. For this to happen, it must consolidate above 1.2230 (21 SMA).
If this occurs, it will give the GBP/USD pair an opportunity to continue rising and the price could reach the level of 1.2345 and even the psychological level of 125.00. If this level is surpassed, GBP/USD could climb as high as +2/8 Murray located at 1.2695.
In case the British pound cannot break the resistance of 1.2225 or if the price is rejected below +1/8 Murray, there will be a signal to sell with targets at 1.2115. The break of 1.2090 could accelerate the bearish movement and the instrument could reach the 200 EMA located at 1.1811.
Since early November, GBP/USD has been trading within an uptrend channel. If the market sees a trend reversal in case the price settles below 1.200, it could reach 8/8 Murray around 1.1718.
Our trading plan for the next few hours is to sell the British pound, only if it trades below 1.2216 (21 SMA), with targets at 1.21 and at the psychological level of 1.20.
The Eagle indicator is signaling overbought on the daily chart. On the 4-hour chart, we see a bearish slope. A technical rebound in the British pound will be considered an opportunity to sell.