Early in the American session, the British pound is trading around 1.2732, above the 21 SMA, and within a downtrend channel formed since December 13.

We can see on the H4 chart that the pound reached the top of the downtrend channel and failed to break it. We see a technical correction. If GBP/USD bounces around 1.2680, it could be seen as a buying opportunity. If bullish strength prevails and if the instrument breaks above 1.2740, we could continue to buy with the target at 1.2817 (+1/8 Murray).

As the British pound is inside the downtrend channel and as long as it trades below 1.2740, it will be seen as an opportunity to sell. In case GBP/USD falls below the 8/8 Murray and below the 21 SMA, we could continue selling with the target at 1.2610. The price could even reach the 200 EMA located at 1.2557.

The eagle indicator is moving below a horizontal line which is a sign that GBP/USD could enter a concolidation stage between 1.2750 and 1.26 in the coming days.