Technical outlook:
GBPUSD seems to have carved a meaningful low around 1.2260 on Monday. The currency was quick to pull back and rallied through 1.2400 intraday before pulling back. A doji was carved on the daily chart indicating a potential reversal in the next few trading sessions. Bulls need to hold prices above 1.2260 to keep the momentum intact.
GBPUSD is facing initial resistance around the 1.2640 level as marked here. A break higher will be required to confirm that bulls are back in control and the trend has reversed. The currency pair is seen to be trading just above 1.2350 at this point in writing and a push above 1.2400 will accelerate further through 1.2640 and higher.
Also, note that the recent swing low registered at 1.2260 has been accompanied by a strong bullish divergence on the daily RSI. It could be seen as a potential trend reversal as bulls prepare to come back in control. A high probability remains for the currency pair to turn higher from here and push through 1.3000 levels in the next few trading sessions.
Trading plan:
Potential rally through 1.2650 and 1.3000 against 1.2200
Good luck!
