Early in the European session, the British Pound (GBP/USD) is trading around 1.2705 within a symmetrical triangle pattern and within the uptrend channel forming on the H4 chart since May 7.
The British pound could break sharply the symmetrical triangle pattern in the next few hours and we could expect a drop. This scenario will be valid only if GBP/USD breaks and consolidates below the 21 SMA around 1.2685, then it could reach the 200 EMA located at 1.2572.
On the contrary, in case the British pound consolidates above the weekly high of 1.2730 or makes a break above the symmetrical triangle, we could expect there to be a continuation of the bullish movement and the instrument could reach +1/8 Murray located at 1.2817 or could reach the top of the uptrend channel around 1.2770.
The British pound has been consolidating at about 1.27 since May 15. Above this area, the outlook could be positive. Below this zone, we could expect a technical correction as the eagle indicator is generating an overbought signal.
Our trading plan for the next few hours is to sell the British pound only in case it falls below 1.2685, with targets at 1.2620, 1.2573, and the psychological level of 1.2500.