Early in the American session, the British Pound (GBP/USD) is trading around 1.2751, below 5/8 Murray, and within the uptrend channel forming since February 13. GBP has been testing the top of the uptrend channel around 1.2755 and is expected to encounter strong rejection in the next few hours, so we could see this as an opportunity to sell.
In case the British pound trades below 1.2756 in the next hours or if a pullback occurs towards 1.2770, it could be seen as an opportunity to sell with targets at 4/8 Murray located at 1.2695. Eventually, GBP/USD could reach the bottom of the uptrend channel around 1.2634.
On the contrary, in case the British pound breaks the top of the uptrend channel and consolidates above 1.2760 (5/8 Murray), we could expect it to continue its bullish cycle and the instrument could face strong resistance of 6/8 Murray located at 1.2817.
Tomorrow, during the American session, US nonfarm payrolls will be published, which could lead to strong volatility in GBP/USD. In case the data is negative for the US dollar, we can expect a strong rally in the British pound.
Because the market is already discounting this fact due to the GBP/USD rally seen in the last few days, the British pound will likely make a strong technical correction.
Our trading plan for the next few hours will be to sell below 1.2770 or in case there is a pullback to 6/8, sell below 1.2817.