Early in the American session, the British pound (GBP/USD) is trading around 1.2254. We can see a technical bounce. If it continues, the instrument could reach resistance levels around 1.2295 towards 1.2330.
According to the 4-hour chart, the British pound is trading within an uptrend channel formed since January 9. GBP/USD is expected to have a technical correction in the next few hours as it is showing signs of exhaustion.
As GBP/USD trades below the weekly resistance of 1.2333, any technical bounce approaching this level will be seen as a signal to sell with targets at 6/8 Murray located at 1.2207.
Only on the condition of a daily close above 1.2335, we could expect an upward acceleration and the currency pair could reach 1.2378 and even 7/8 Murray located at 1.2451. This level coincides with the maximum zone of December 15, 2022.
On the other hand, with a sharp break of the uptrend channel and a daily close below 1.2195, we could expect a bearish acceleration and GBP/USD could reach the 200 EMA located at 1.2071 and could even reach the 5/8 Murray level at 1.1962.
The eagle indicator is reaching overbought levels after having moved away from 95 points for several hours. Currently, we can see in the chart that the signal shows overbought levels again, which is likely to be a technical correction of the GBP/USD pair. The instrument could fall to 1.22 or if it trades below the 21 SMA, it could reach the 200 EMA.
Our trading plan for the next few hours is to wait for the British pound to reach resistance levels around 1.2295 or towards 1.2330 to sell, with targets at 1.2207 at 1.2095.
