Early in the European session, the British pound (GBP/USD) is trading around 1.2391 below the 200 EMA and above the 21 SMA located at 1.2365.

We can observe that the pound maintains a bearish trend channel formed since the beginning of May but it could be accumulating and then resume its bullish cycle and GBP/USD could reach 7/8 Murray located at 1.2573.

The technical outlook for the next few days shows a small chance of bullish momentum, but the buyers may find it difficult to overcome the resistance at 1.2450 (6/8 Murray).

The recent optimism due to the increase in the US debt ceiling supports investors' confidence, which is reflected in generally positive sentiment around stock markets and weakens the safe-haven dollar.

Yesterday during the European session, the British pound reached the 3/8 Murray zone around 1.2329 and gave a strong technical bounce which saw a move towards the 6/8 Murray reaching a high of 1.2449.

In case a technical correction occurs in the next few hours and GBP/USD rebounds around 1.2365 (21 SMA) or 1.2335, this could be seen as a signal to buy with targets at around 1.2451.

Additionally, with a sharp break above the 6/8 Murray and above the 200 EMA, the instrument could reach the 7/8 Murray zone and ultimately, we could expect it to reach the 8/8 Murray at 1.2695.

On the contrary, if the British pound falls below 1.2330, a downward acceleration is expected, which could push the price down to 4/8 Murray located at 1.2207.