Yesterday, the GBP/USD exchange rate reversed south from the upper boundary of the medium-term descending channel. During Wednesday morning, the rate was testing the support cluster formed by the 55-, 100– and 200-hour SMAs, as well the weekly PP in the 1.3116/1.3141 area.
If the given support holds, it is likely that the currency pair could re-test the given channel. If the given trend does not hold, a breakout north could occur. A possible upside target is the resistance level formed by the weekly R1 and the monthly PP at 1.3228.
If the given support cluster does not hold, it is likely that the British Pound could depreciate against the Us Dollar in the short term. In this case the exchange rate could target the 1.3050 level.
