On Thursday, the GBP/USD exchange rate consolidated at the 1.2350 area. During today’s morning, the rate was testing the lower boundary of the short-term descending channel at 1.2275.
From a theoretical point of view, it is likely that a reversal north could occur in the nearest future. A possible upside target is the 1.2380 level. In this case the currency pair has to surpass the weekly S2 and the monthly R1 circa 1.2300.
However, note that the currency pair is pressured by the 55-, 100– and 200-hour moving averages, currently located in the 1.2361/1.2443 range. Thus, it is likely that the British Pound could continue to depreciate against the US Dollar. The rate could target the weekly S3 at 1.2202.
