Early in the American session, the British Pound is trading around 1.2780, inside the downtrend channel, below the 200 EMA, and below the 5/8 Murray under bearish pressure after breaking the key support of 1.28.

Technically, the British pound could find good support around the bottom of the downtrend channel or it could bounce around 4/8 Murray located at 1.2695.

On the other hand, if the pound makes a pullback, we could expect it to reach 1.2845, the level where the top of the downtrend channel is located. A sharp break and consolidation above the 200 EMA and the 21 SMA could mean a change of trend and GBP/USD could reach 6/8 Murray 1.2939.

In the next few hours, the Bank of England is due to unveil its decision on the key policy rate. We believe this event could trigger strong volatility and the British pound is likely to look for support. We reckon that around 1.2935 or 1.2700 a technical bounce could occur which could be seen as an opportunity to buy.

The eagle indicator is in the oversold zone. Hence, a technical bounce is likely to occur in the coming hours. Besides, as long as GBP/USD trades above 1.2695, there is still an opportunity for the British pound to recover.