The GBP/USD pair is trading around 1.2635, bouncing after a sharp drop around 2/8 Murray at 1.2573. From that level, the British pound has been bouncing and is now showing signs of exhaustion. Below the 200 EMA or below the 4/8 Murray pivot point located at 1.2695, GBP/USD could resume its bearish cycle.
We expect GBP to fall towards the area of 1.2573. The instrument could even reach the psychological level of 1.25.
In the next few hours, we could look for opportunities to sell. In case the pound sterling consolidates below 1.2696 (200 EMA), this could be seen as an opportunity to sell with targets around 1.2634 and 1.2573.
GBP/USD had a break. If the price consolidates above 1.2756, it could continue its rise and could reach 1.2817 and ultimately, the psychological level of 1.30.
Given that the pound is under a strong downtrend, we believe that with any technical bounce below 1.2817 (6/8 Murray), the outlook will remain negative for the British pound.
