GBPUSD: Poised for Another Rally?

On the 3-Day time frame, the relative strength indicator appears to be forming an inverted head and shoulders pattern formation below the 50 neutral zone.

This pattern could boost bullish momentum above both the 50 level and 1.2630 threshold - pushing the RSI towards the 60 zone and testing the 1.28 resistance level. This setup aligns with the trendline connecting the consecutive lower highs from 2014 to 2021.

A firm break beyond the 1.28 mark can extend gains towards the 1.2950 level, aligning with the 0.618 Fibonacci retracement level measured from the September 2024 high of 1.3434 to the January 2025 low of 1.21.

On the downside, a move below 1.25 may reverse gains toward 1.2360, 1.2280, and 1.21- the final barrier before a potential bearish extension toward 1.17.

Key Events to Watch this week:
- UK Claimant Count Change (Tuesday)
- UK CPI (Wednesday)
- UK Flash Manufacturing and Services PMI (Friday)

- Razan Hilal, CMT