British Pound is trading at around 1.2137 above the 21 SMA located at 1.2083 and below the downtrend channel which has been in progress since March 18.

The pound has made a technical correction after reaching the top of the downtrend channel at around 1.2275. This correction could be considered an opportunity to buy above the 21 SMA. Hence, GBP/USD could again resume its bullish cycle.

The dollar index was bouncing above 4/8 Murray at around 104.60. The outlook remains positive for the dollar which could put downward pressure on the British pound and it could fall towards the support zone of 1.2080.

As long as the British pound trades above 1.2083, the outlook could remain bullish. A sharp break of the downtrend channel at around 1.2230 could accelerate the bullish move towards 6/8 Murray at 1.2451.

Our trading plan for the next few days is to wait for the British pound to consolidate at around 1.2080 to buy with targets at 1.2207, 1.2329, and 1.2451.