Early in the American session, the British pound (GBP/USD) is trading around 1.2138, moving away from the high reached at 1.2209. According to the daily pivot, it is negotiating in the support zone, and a rebound is likely to occur towards 1.2180 in the next few hours.
According to the 4-hour chart, the area of 6/8 located at 1.2207 has become a strong resistance due to the fact that the pound tried to break through this zone in December but failed and since then began a bearish cycle.
In case the British pound consolidates below 1.2207, there is a strong probability that there will be a technical correction and it will reach the area of the 21 SMA located at 1.2050. GBP/USD could even reach the psychological level of 1.2000.
Below the 200 EMA, there is a strong probability that the pound will start a bearish cycle and could reach 1.1962 (5/8 Murray), The instrument could even fall to the January 6 low at 1.1840.
In case the British pound consolidates above 1.2207, we could expect it to resume its bullish cycle. Hence, the price could reach 1.2360 and the 7/8 Murray area around 1.2451.
Our trading plan for the next few hours is to wait for a pullback towards the weekly resistance zone around 1.2170. Alternatively, in case the bullish movement continues, we can expect GBP/USD to decline to 1.2207 to sell, with targets at 1.2100 and 1.2051 (21 SMA).