Early in the American session, the British pound (GBP/USD) is trading around 1.2390, below the 21 SMA, below the 200 EMA, and within a downtrend channel formed since May 4. The instrument is under strong bearish pressure. So, GBP/USD is likely to continue its fall in the next few hours.
In the last hours, we see that GBP/USD tried to break the 200 EMA and the top of the bearish channel until it reached 1.2469 and failed. Since then, the instrument made a new technical correction.
Now we expect that a technical rebound will resume in the next few hours which could be used as an opportunity to sell below 6/8 Murray (1.2451) which has become strong resistance.
In the next few hours, we expect the British pound to bounce above 5/8 Murray and it could try to break the resistance at 1.2451. In case of a sharp break and consolidation above 1.2470 on the 4-hour chart, the price could reverse its trajectory and could reach 7/8 Murray at 1.2573 and finally reach the area of 1.2695.
On the other hand, a pullback towards 1.2429 (21 SMA) and 1.2451 (6/8 Murray) could be seen as a clear signal to sell with targets at 1.2370 and 1.2329 (5/8 Murray). The Eagle indicator is in the oversold zone. However, GBP/USD lacks bullish strength and due to this, we could take advantage to sell it in the coming hours.