The British pound is trading around 1.3329 within a downtrend channel that has been forming since October 20 and is rebounding after finding strong support near the lower band of that channel.
The British pound is consolidating around the 21-day and 200-day simple moving averages (SMA) within a downtrend channel, so we believe that if the pound encounters strong resistance in this area, the downtrend is likely to continue in the coming days, with targets at the 1/8 Murray level, around 1.3244.
If the British pound breaks above the downtrend channel and consolidates above the 200-day EMA at 1.3331, this could be considered a buying opportunity with targets at 1.3366; ultimately, we expect GBP/USD to reach the Murray 4/8 level, around 1.3427.
Conversely, a drop below the Murray 2/8 level at 1.3305 could indicate that the outlook for the British pound remains bearish, and we could expect GBP/USD to reach the October 14 price levels, around 1.3130.
The Eagle indicator has reached oversold levels, although it is still showing a negative signal; therefore, we must keep an eye on the 200-period exponential moving average (EMA) zone. Above this level, the outlook could be a recovery in the British pound, and below it, downward pressure will continue over the next few days.
