Early in the European session, the British pound is trading around 1.2326 showing signs of exhaustion of the bullish force. We can see that it is consolidating below the uptrend channel that has been broken. GBP/USD is now below the 21 SMA located at 1.2364 and above the 6/8 Murray located at 1.2207.

Yesterday during the American session, the British pound fell to a low of around 1.2261, after better-than-expected US PMI and weak UK data.

GBP/USD started a technical rebound from 1.2261 and is now consolidating around 1.2322. This level is the key because it is located below the uptrend channel formed since January 9, which has become a strong resistance.

Only a daily close above 1.2370 on the 4-hour chart could mean the resumption of the bullish cycle and the pound could once again trade within the uptrend channel and GBP/USD could reach 7/8 Murray at 1.2451 and could even reach the psychological level of 1.25.

If the British pound trades below the key point of 1.2370 in the next few hours, there is a possibility that it will continue to fall and the instrument could reach the 6/8 Murray at 1.2207 and could even reach the 200 EMA located at 1.2153.

Our trading plan for the next few hours is to sell below 1.2365 or at current price levels around 1.2322, with targets at 1.2250, 1.2207, and 1.2153.