GBP Maintains Upside, but Gains Might be Overdone

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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.

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