Early in the American session, the British pound is trading around 1.2592 below the 21 SMA and above the 7/8 Murray line. We can observe a bearish correction from the high of 1.2667.
A technical bounce towards the 1.2610 level is likely to follow in the next few hours which could be seen as an opportunity to sell.
The British pound is likely to consolidate below the 1.2660 level ahead of the pending interest rate decision on May 11. The BoE is expected to raise the key interest rate by 0.25%. This decision has already been valued by the market. Investors anticipate an encouraging speech from the Bank of Ebgland's Governor which could support the British pound. Otherwise, we could expect a strong technical correction towards 1.23 and 1.20.
On the condition of a daily consolidation above 1.2610 (21 SMA) and trading above 1.2620, the British pound is expected to continue to rise and GBP/USD could reach 8/8 Murray located at 1.2695.
Conversely, in case the British pound falls below 1.2607, the instrument is expected to extend the bearish movement and could reach the bottom of the uptrend channel around 1.2530. Finally, GBP/USD could reach 6/8 Murray located at 1.2451 and the 200 EMA located at 1.2432.
Since May 8, the eagle indicator is showing extremely overbought signs, so any technical bounce below 1.2667 will be seen as an opportunity to sell.