GBP/USD pair is located above the 21 SMA and is now trading in a tight range above 1.2000. The short-term technical outlook suggests that consolidation is likely to continue until the Fed Chairman's testimony on Capitol Hill and the release of the US nonfarm payrolls.
The psychological level of 1.20 could offer support for the British pound and it could bounce until reaching the 200 EMA located at 1.2088.
According to the 4-hour chart, we can see the formation of a triple bottom around the 1.1921 area. As long as the British pound trades or consolidates above this level, it is expected to reach the resistance zone of 1.2207 (4/8 Murray).
A bearish move below the key level of 1.1920 could confirm a descending triangle, opening the next support levels at 1.1840 (1/8 Murray) and 1.1718 (0/8 Murray).
Investors' attention will now focus on the testimony of Fed Chairman Jerome Powell and the US nonfarm payrolls employment report. These data could offer the direction of the GBP/USD pair for the next few days.
In case the British pound continues to trade above 1.2001 in the next few hours, GBP/USD is expected to rise and reach 3/8 Murray located at 1.2085. A sharp break and consolidation on the 4-hour chart above this level will be a clear signal to buy above 1.2090 (200 EMA – 3/8 Murray) with targets at 4/8 Murray located at 1.2207.
Conversely, in case the pound falls below 1.1990, we should expect a new consolidation or a bounce around 2/8 Murray located at 1.1962.
The eagle indicator is giving a positive signal. So, GBP/USD is likely to extend its rise in the coming hours. The key would be to keep trading above the psychological level of 1.20.