Early in the session American, the British pound is trading around 1.2040, above the 21 SMA, and above the downtrend channel formed since February 3.

We can see on the 1-hour chart that GBP/USD broke sharply in the bearish channel and is now consolidating above it. This could be a clear signal to continue buying and the instrument could reach the 3/8 Murray at 1.2102. Eventually, it could reach the 200 EMA located at 1.2190.

In case the British pound continues to rise and reaches the 4/8 Murray area or the 200 EMA located at 1.2190, this price action will suggest an opportunity to sell because strong weekly resistance is found in this area. If the pair comes under bearish pressure, it could resume its bearish cycle and we could sell with targets at 1.2085 and 1.2023.

Only a daily close above 1.2207 could revive the bullish cycle and the British pound could reach 1.2350 and 1.2451.

As long as GBP/USD remains trading above the psychological 1.20 level, there is a chance that the pound sterling will continue to bounce. Alternatively, if the instrument declines, it could reach the 2/8 Murray support at 1.1962 (2/8 Murray) and then it could trigger a new bullish move. This scenario could be considered an opportunity to buy.

Our trading plan for the next few hours is to buy the pound above 1.2023 (21 SMA), with targets at 1.2085, 1.2150, and 1.2207 (4/8 Murray). The eagle indicator on 1-hour charts is giving a positive signal which supports our bullish strategy.