On Friday, following strong employment data from the U.S., the pound sterling reached a significant support level at 1.2186 and has paused its movement this morning.
The Marlin oscillator's signal line has exited its descending channel, suggesting a continued bearish outlook. However, for this trend to develop, the price must break below the 1.2186 support level. If this level is breached and the price consolidates below it, the next target would be at 1.2036.
On the four-hour chart, a mild divergence has formed, which indicates potential for a correction.
For the downtrend to persist, the price not only needs to break below the 1.2186 level but also must consolidate beneath it in the four-hour timeframe. If this doesn't happen, it could lead to a correction toward the 1.2294 resistance level.
With no major news expected from the U.S. or Europe today, the correction may take up to two days to fully unfold.
