Early in the American session, the British pound is trading above the support of 3/8 Murray.

After having found a strong bottom in this area, GBP is showing signs of a small recovery. The objectives will be to go up towards 4/8 Murray located at about 1.3427.

The dollar index (#USDX) hit a high of 97.37, having reached overbought levels.

It is likely that in the next few hours there will be a correction which could favor the recovery of the British pound and the other currency pairs that trade against the dollar.

The zone of 3/8 Murray has been tested several times and has become a strong bottom for the British pound. This is a good sign to buy above 1.3366 with targets at 21 SMA 1.3449 and up to 200 EMA located at 1.3502.

On January 26, the eagle indicator reached the 5-point level. It means that sterling is extremely oversold. So, this is a positive sign for the British Pound and we could have an opportunity to buy at current prices levels with targets at 1.3500 until the next week.