GBP/USD is trading below the 21 SMA and below the 200 EMA. We can see on the 1-hour chart that the British pound is trading within an uptrend channel formed since February 17 and below a downtrend channel formed since February 21.
The US dollar index (USDX) continues to rise. If the British pound fails to break the 1.2175 zone in the next few hours, we could expect a resumption of the bearish cycle.
With a sharp break below the psychological 1.20 level, we could expect a drop towards the 2/8 Murray located at 1.1962.
Encouraging UK PMI data revived hawkish expectations from the Bank of England (BoE) and boosted the sterling. In case GBP bulls continue to hold the price above 1.2085, it could reach 4/8 Murray at 1.2207.
Our trading plan for the next few hours is to buy the British pound above 1.2030, with targets at 1.2073 and 1.2090. Additionally, a break of the downtrend channel around 1.2090 will be a signal to buy with the target at 1.2207.
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