Technical outlook:
GBPUSD seems to have carved a meaningful swing low around 1.2260 early this week and the next move could be higher towards 1.2640 and 1.3000 levels in the next several weeks. The currency pair has produced three Doji candlestick pattern on the daily chart indicating indecision and a potential reversal ahead against the 1.2260 mark.
GBPUSD is seen to be trading around 1.2330 at this point in writing and it is expected to push higher through 1.2640, which is initial resistance, over the near term. A break would also confirm a meaningful bottom in place at 1.2260 as bears are coming back in control. The daily chart has got a potential to produce a Morning Star bullish reversal pattern by the end of the day.
GBPUSD has also been producing a strong bullish divergence on the daily RSI as seen here. The above also is indicative of a potential trend reversal against 1.2260 lows. Furthermore prices are finding support around fibonacci 0.618 retracement of a larger degree upswing around the 1.2300-1.2500 zone along with resistance turned support trend line.
Trading plan:
Potential rally through 1.2640 and 1.3000 against 1.2200
Good luck!
