Early in the American session, the British pound is trading around 1.2666, approaching the May 10 high of around 1.2678.
It is likely that in the next few hours, GBP/USD will continue to rise and it could reach the 8/8 Murray area around 1.2695, a level that will act as strong resistance.
According to the daily chart, we can see that the British pound is in a strong upward trend, but it could be approaching resistance and overbought levels. In case there is a rejection around the 8/8 Murray, we could expect the pound to make a technical correction and could even fall and reach 1.2573 (6/8 Murray) and the 200 EMA zone located at 1.2457.
In case bullish strength prevails, we should expect GBP/USD to consolidate above 1.2700. Then, it could reach the strong resistance area around 1.2756 (+1/8 Murray).
Conversely, in case the pound falls below the 1.2678 high, then it could confirm a double top pattern, which could be seen as a technical reversal signal. If this scenario occurs, we could sell with targets at 1.2573 (6/8 Murray). If bearish pressure prevails, GBP/USD could fall to the bottom of the uptrend channel around the psychological level of 1.25.
According to the H4 and H1 charts, we can see that the British pound is reaching overbought levels, which could be a sign of a technical correction for the next few days.
Therefore, our trading plan for the next few hours is to sell the British pound if it reaches the 8/8 Murray around 1.2695, with targets at 1.2600 and 1.2573.