Early in the Asian session, GBP/USD is trading above 4/8 Murray and above the 21 SMA located at 1.3201.
Due to the fact that yesterday it could not consolidate below 4/8 Murray, it seems that the pound could resume its upward movement in the next few hours and could reach the 200 EMA located at 1.3283.
Since March 15, the British pound is trading above an uptrend channel. Yesterday the pound, was testing this channel througout the day and it has proven to be a very strong bottom.
Therefore, in the coming hours if the pound consolidates above the trend channel and above 4/8 Murray, our trading plan will be to continue buying with targets towards the 5/8 Murray zone at 1.3305.
The US Dollar index (USDX) remains firm around 98.70. Obviously, it is overbought, approaching 98.43 of 4/8 Murray. A sharp break of this support could accelerate the decline towards the 200 EMA located at 97.65. This drop in USDX could favor GBP/USD and the pair could rise in the next few hours.
Chief of the Ukrainian General Staff Andriy Yermak said there was progress in ceasefire negotiations with Russia and expressed cautious optimism, the Axio correspondent reported. In case the tensions between Russia and Ukraine ease, the British pound could rise and reach 6/8 Murray at 1.3427.
On the other hand, a positive bias around equity markets capped gains for the safe-haven US dollar, which in turn was seen as a key that gave GBP/USD some support.
In case the British pound falls below 4/8 Murray and breaks the uptrend channel, it could accelerate the bearish move. The level that the pound must trade is 1.3170. Below an acceleration to the downside is expected at the support 3/8 Murray at 1.3061.
