A bullish trend emerged in the market between levels 1.0400-1.0600, which acted as a barrier against further decline.
Bulls continued to defend the rising bottoms at 1.1150 and 1.1750, signaling an expected continuation of the bullish trend above 1.1750.
At 1.2340, an initial rejection by bears was observed, followed by a subsequent bounce in favor of the bulls.
However, the GBPUSD bulls were unable to establish a new high and instead formed a double-top pattern around the same price level.
As a result, a bearish pullback towards 1.1800 occurred, which was considered as a valid buying opportunity with an initial target of approximately 1.2350.
Recent fundamental analysis indicates that the GBPUSD pair has been supported by the UK's economic recovery and successful vaccination campaign, while the USD has been under pressure due to low interest rates and inflation concerns.
Despite this positive outlook, traders should exercise caution and be mindful of any news that may impact the performance of the currency pair.
If the pair continues to trend upwards persistently above 1.2340, it could potentially advance towards 1.2700.
However, if the current bullish breakout is proven to be a trap, another bearish movement towards 1.1750-1.1800 could be expected.
