The British pound (GBP/USD) in the American session broke the 21 SMA and is located below 6/8 Murray. A pullback towards the 1.2450 area could follow in the next few hours. In case GBP/USD fails to return higher from this level, we could expect the bearish cycle to resume and the instrument could reach the 200 EMA located at 1.2342.
On the 4-hour chart, we can see that the British pound has a slightly bullish trend channel which acts as a head-and-shoulders technical pattern. In case the pound breaks this neckline, we could expect that pattern to be confirmed in the coming days and GBP/USD could reach 4/8 Murray at 1.2207.
The latest candles that have formed since the beginning of April showed that the British pound has strong resistance around Murray's 6/8 and each attempt has met with rejection. This means that below this zone, there is strong bearish pressure and therefore we could continue selling if the pound falls or remains below 1.2451 and below the psychological level of 1.25.
On the contrary, in case the British pound consolidates above the psychological level of 1.25, we could expect a bullish acceleration and the currency pair could reach 7/8 Murray at 1.2773 and could quickly rebound to the zone of 8/8 Murray located at 1.2695.
Our trading plan for the next few hours is to sell below 1.2445 with targets at 1.2370 and 1.2342. The eagle indicator is giving a negative signal but it is approaching the oversold level. So, if there is a pullback, we could take the opportunity to sell.
