Early in the session American, the British pound is trading around 1.2146, above the 21 SMA, below 4/8 Murray (1.2207), and below 200 EMA (1.2185).
We can see on the 4-hour chart that GBP/USD is trading above 21 SMA (1.2063) and is now consolidating above it. This could be a clear signal to continue buying and the instrument could reach the 4/8 Murray at 1.2207.
In case the British pound continues to rise and reaches the 4/8 Murray area or the 200 EMA located at 1.2185 - 1.2207, this price action will suggest an opportunity to sell because strong weekly resistance is recognized in this area.
If the pair comes under bearish pressure, it could resume its bearish cycle and we could sell the instrument around 1.2185 or 1.2207 with targets at 1.2085 (3/8Murray) and 1.2063.
Only a daily close above 1.2207 could revive the bullish cycle and the British pound could reach 1.2329 (5/8 Murray) and 1.2451(6/8). As long as GBP/USD remains trading above the psychological 1.20 level, there is a chance that the pound sterling will continue to bounce.
Alternatively, if the instrument declines and trades below 1.2207, it could reach the 2/8 Murray support at 1.1962 (2/8 Murray).
Our trading plan for the next few hours is to wait to sell the pound around 1.2185 (200 EMA), with targets at 1.2085, and 1.2063.
