Technical outlook:
GBPUSD climbed above the 1.2330 highs intraday on Monday before reversing sharply to close lower. The currency pair is seen to be trading close to 1.2265 during the Asian session on Tuesday and is expected to drag lower towards 1.2120 in the near term. Bulls will be inclined to come back in control thereafter and push through 1.2665.
GBPUSD has been dropping from 1.4250 since January 2021. The entire drop between 1.4250 and 1.1930 seems to be a corrective zigzag (5-3-5), which looks complete. Furthermore, prices have bounced off the Fibonacci 0.786 retracement of its larger-degree upswing between 1.1400 and 1.4250 respectively.
GBPUSD is poised to resume its rally if the suggested structure holds well. Moreover, the currency pair has successfully carved a lower degree upswing between 1.1930 and 1.2400 in the past few trading sessions. Ideally, prices should retrace lower through the 1.2120-30 area before resuming higher again.
Trading plan:
Potential rally towards 1.2665 and higher against 1.1800
Good luck!
