Early in the American session, GBP/USD is trading around 1.2257, falling after reaching a high of 1.2296, the level last seen on February 2.

The short-term technical outlook points to an uptrend, but since March 17, it is showing signs of exhaustion and a pullback towards the pivot point around 1.2217 is likely.

In the next few hours, the FED is expected to increase its interest rate by 0.25% until it reaches the level of 5%. This fact has already been known by investors for several weeks. However, the market is likely to give its response to the comments of the Fed Chairman.

If Powell assures that the liquidity problems in the banking sector are under control and that they will continue to tighten monetary policy to stop inflation, the US dollar is likely to strengthen and could put strong pressure on the GBP/USD and it could decline to the psychological level of 1.20.

The key level is located around 1.2217 and around 1.2207. If the British pound breaks both levels and consolidates below the 4/8 Murray, we could expect a strong technical correction and the instrument could reach the 200 EMA located at the 1.2095 level which converges with 3/8 Murray.

On the other hand, in case the British pound reaches the support of 1.2217 (21 SMA) in the next hours and rebounds above it, the instrument could resume its bullish cycle and could reach 5/8 Murray located at 1.2329.

In the 4-hour chart, we can see that the British pound has formed a symmetrical triangle. It is probable that a sharp break below 1.22 could confirm the bearish signal and the price could reach 1.2085 (3/8 Murray) and finally the key support zone of 1.1962 (4/8 Murray).

On March 17, the eagle indicator reached the extremely overbought zone and it is likely that any technical bounce below 1.2329 (5/8 Murray) will be seen as a signal to sell.