GBPUSD Holds Below 0.618 Fibonacci Retracement

Following the DXY's decline, the British pound surged back above the trendline connecting lower highs between 2014 to 2021, aligning with a key resistance at the 0.618 Fibonacci retracement of the downtrend between the September 2024 high (1.3434) and the January 2025 low (1.2099) at 1.2945.

Current Market Setup:

• RSI on the 3-day time frame is now overbought, aligning with the inverted head and shoulders target formed by the RSI trend near oversold levels, reinforcing reversal potential.
  
• Further downside risks persist, with market sentiment hinging on growth data, trade war developments, and US inflation figures.
  

Key Levels to Watch:

• A decisive close above 1.2850 could pave the way toward 1.3020, 1.3160, and 1.34.
  
• Failure to hold gains could trigger a pullback toward key support zones at 1.28, 1.27, and 1.2570.
  

Key Events This Week:

• US CPI
  
• UK GDP
  
• Trade War Developments
  

- Razan Hilal, CMT