Cable looks ready for a reversal from its short-term downtrend, as the pair already busted through its descending trend line.

Price is in the middle of a correction, though, so more pound bulls might be looking to hop in at these bargain levels marked by the Fib retracement tool.

So far, the 50% level already seems to be holding as a floor since it lines up with the 200 SMA dynamic inflection point that adds to its strength as support.

The 100 SMA is above the 200 SMA, after all, confirming that the uptrend is more likely to resume than to reverse. However, Stochastic is already closing in on the overbought region to suggest a return in bearish vibes.

If that’s the case, a larger correction to the 61.8% Fib, which is closer to the former trend line resistance, might take place. If the Fib levels are enough to keep losses in check, GBP/USD could set its sights back on the swing high near 1.2200 and beyond.

Worried you might miss the whole move? Scaling in at current market prices plus a more conservative entry could be an option!

Don’t forget that U.S. economic data released this week has been mostly weaker than expected, which could be dampening expectations of more aggressive Fed tightening and therefore weighing on the dollar.