Technical outlook:

GBPUSD slipped through 1.2560 on Tuesday after reversing from the 1.2665 high over the last week. The currency pair might have resumed its corrective drop and could reach 1.2350 in the next few trading sessions.Bears will be inclined to hold prices below 1.2665 to keep the near-term structure intact.

GBPUSD might have carved a lower degree upswing between 1.2150 and 1.2665 in May 2022. Further, note that initial resistance around 1.0640-50 has been taken out already. A high probability remains for a corrective pullback from here that drags up to 1.2350 before resuming higher again. Also, note that 1.2350 is the Fibonacci 0.618 retracement of the above rally. Hence, there is a probability of a bullish bounce.

GBPUSD might be either working on its entire drop between 1.4250 and 1.2150 or resuming another uptrend, which would last for several months, pushing prices above 1.4250. Either way, we can expect a rally towards 1.3150-1.3200 at least, if not higher. Immediate resistance is seen around 1.3150 while support comes in around 1.2150 respectively.

Trading plan:

Potential short-term drop through 1.2350, then rally towards 1.3150 against 1.2100

Good luck!