The British pound is trading around 1.3395, above the 21-day SMA, and has reached the top of the downtrend channel that has been forming since early May.

A H4 chart clearly shows that the British pound has failed to break out of the downtrend channel on several occasions and has been under downward pressure. However, it could be forming a pattern known as a pennant, and a decisive break above 1.34 could trigger a strong upward move, with the British pound potentially reaching the 200 EMA around 1.3481 and possibly even hitting the 7/8 Murray level around 1.3550.

Conversely, a drop below 1.3383 could continue the bearish scenario for the British pound, and we expect it to reach the 5/8 Murray level again around 1.3305.

The Eagle indicator is showing a positive signal, so it is more likely that the British pound will continue to rise in the coming days; therefore, we will look for opportunities to buy above 1.34 or sell if the price falls below 1.3380.