Early in the American session, the British pound is trading around 1.2543, below the 21SMA, and below the 7/8 Murray located at 1.2573. We can see the British pound is trading within a bullish channel and it is likely to reach the bottom of this channel around 1.2530.
A technical bounce could occur if the British pound falls around 1.2515, the psychological level. GBP/USD could resume its bullish cycle and reach 1.2573. This area is the key because it coincides with the 21 SMA and could be seen viewed as a signal to sell.
On the H1 chart, we see a breakout of the rising wedge technical pattern. This represents a clear sign of a technical reversal but for this, we could expect a break below the uptrend channel and then the pound could reach the 200 EMA located at 1.2484 and could even reach the 6/8 Murray at 1.2451.
Since June 8, the Eagle indicator has been giving an extremely overbought signal. So, any technical rebound could be seen as a signal to sell.
In the next few hours, we expect the pound to reach the psychological level of 1.25 which could offer a technical bounce to the British pound and then, GBP/USD could reach the 7/8 Murray or the 21 SMA.
Our trading plan for the next few hours is to sell below 1.2515 or wait for a technical bounce towards 1.2573 to sell, targeting 1.2484. The Eagle indicator is giving a negative signal which supports our bearish strategy.
