Early in the American session, the British pound was trading around 1.2726, below the 21 SMA, and above 8/8 Murray. On the H4 chart, the British pound has reached an area of strong resistance around 1.2784, which has become a strong barrier. GBP/USD is likely to continue its decline in the next few hours and could reach the 200 EMA at 1.2653.

Since early January, the British pound has been bouncing above the 200 EMA, forming an uptrend channel but has been showing signs of exhaustion. Should the British pound trade below 1.2750, we could expect a downward acceleration and the price could reach 8/8 Murray and finally, the bottom of the uptrend channel around 1.2645.

On the other hand, if the British pound consolidates above 1.2760, we could expect a recovery of the pair and it could reach +1/8 Murray located at 1.2817.

Technically, the instrument is giving overbought signals. As long as it trades below 1.2817, it could be seen as a signal to sell in the short term.

The market sentiment report shows that there are 48.22% of traders who are buying the British pound. If this statistic increases, the pound sterling could fall in the coming days.

Our trading plan for the next few hours is to sell the British pound below 1.2748 with targets at 1.2695 and 1.2653. The eagle indicator is giving a negative signal and supports our bearish strategy.