Early in the American session, the British pound is trading around 1.2172, below the strong resistance 6/8 Murray located at 1.2207, and above the 21 SMA and the 200 EMA.
On the 4-hour chart, we can see that the pound is following a strongly bullish bias which could be interrupted by a technical correction in the next few hours.
The weekly resistance is located around 1.2175. If the British pound consolidates below this level, we could expect a technical correction in the next few hours towards the 21 SMA located at 1.2022.
On the other hand, a pullback towards 6/8 Murray which represents strong dynamic resistance could put pressure on GBP/USD and the instrument could kick out of the resistance level. This could be seen as a signal to sell, with targets at 1.2100 and 1.2022 (200 EMA).
The eagle indicator is approaching overbought levels. A technical correction is likely to occur in the next few hours due to the strong rebound seen since last week. So far, we have not seen a significant correction.
Therefore, any technical bounce towards the zone of 1.2175 or close to 1.2207 (6/8 Murray) will be seen as a clear signal to sell. As the British pound trades below 1.2207, there is a strong probability of a downward technical correction in the coming days.
