The pound sterling is building up gains on the back of a weaker USD.
But, the current price action suggests that the gains might be overdone for the moment.
This comes as there is a confluence of the horizontal resistance level and the trend line around 1.2277.
If price action fails to breakout higher, we suspect a reversal in the near term.
The hidden divergence on the Stochastics oscillator also adds to this view. As a result, there might a pullback soon.
For now, the downside target is at the previous level of 1.2100.
