Technical outlook:
GBPUSD is testing its swing high around 1.2665, which was carved over the last week. The currency pair is trading close to 1.2650 during the early European session on Monday, expected to turn lower soon. Bears will be poised to remain in control for now and drag prices through 1.2350 before giving in to bulls.
GBPUSD has carved a meaningful lower degree upswing between 1.2155 and 1.2665 as seen on the daily chart here. Also, note that initial resistance has been taken out already around the 1.2640-50 area. Ideally prices should drop through 1.2350, which is the Fibonacci 0.618 retracement of the above upswing, before turning higher.
GBPUSD has been dropping since January 2021 from the 1.4250 highs. The entire larger degree drop between 1.4250 and 1.2155 has taken shape of a correction (zigzag). If the above structure holds well, bulls would remain in control and push through 1.3150 at least in the next few weeks. The bottom line is that 1.2155 should remain intact.
Trading plan:
Potential short-term drop towards 1.2350, then rally through 1.3150.
Good luck!
