GBP/USD is trading around 1.2546 within the uptrend channel forming since April 22 but showing exhaustion of bullish strength as it encountered strong resistance around the 200 EMA located at 1.2553.
In case the bullish trend prevails, the British pound should consolidate above 1.2573. Then, we could look for opportunities to buy at 8/8 Murray targets at 1.2696 and 1.2840.
In case GBP encounters rejection around 1.2553 (200 EMA) or 1.2573 (7/8 Murray) and fails to consolidate above this area, it will be seen as a signal to sell, with the target at the 21 SMA located at 1.2492.
The outlook remains positive for the pound sterling, but a change and a sharp break of the uptrend channel could change the outlook and GBP/USD could resume its bearish cycle and could reach 5/8 of Murray at 1.2329. Finally, the instrument could fall to 4/8 of Murray located at 1.2207.
A sharp break of the uptrend channel below 1.2490 will be seen as a signal to sell since the eagle indicator has been moving in an overbought area since April 26. Therefore, a technical correction is imminent in the coming days.
