DBS Bank: GBP/USD rally unlikely to be extended

Analysts of Development Bank of Singapore Limited suggest that for the GBP/USD pair, near-term charts are showing that a complete near-term rally to the upside is done and some support is shrouded around 1.2960 for now.

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“It is doubtful this rally can extend with news flow getting murkier.”

“GBP has done & dusted 76.4% Fibonacci retracement of 1.3217-1.2773, at 1.3109. Minor resistance stands at 1.3109. Clearing that pulls the trajectory to close off a near-term target around 1.3160, & GBP should mature the next price in the I-II-III sequence.”

“So in gist, look for GBP’s most recent rally from 1.2773 to enter its final phase. Once we get closer to that 1.3160 target, GBP should enter a fade-off opportunity. This view is only invalidated if GBP cracks higher and sustains a rally through 1.3258.”

“Also bear in mind – for GBP to exact a larger decline, it has to venture under 1.2669, 1.2620 – the head-and-shoulders pattern.”