GBP/USD: Buyers to emerge at the 1.3165 level – DBS Bank

GBP/USD has dropped to a fresh 1.3279 low. As Benjamin Wong, Strategists at DBS Bank, notes, 1.3165 is a key touchpoint as it axes a key 38.2% Fibonacci retracement support at 1.3156. Buying interest is expected to emerge at this level.

Technical indicators start to move towards signs of stabilising

“There are several potential focal points to mull a tactical long. 1.3156 locates the 200-week moving average level, and there is as well 1.3250 which sits on the fringe of the weekly Ichimoku chart. The former might offer appeal as 1.3156 axes nicely (1.3165) the 38.2% Fibonacci retracement of the post-covid spike lows of 1.1412 up to the early June highs of 1.4248.”

“A move in the direction towards the 1.3165 touchpoint is likely the penultimate leg 4 of the 1-2-3-4-5 price leg. A stretched level to break and provoke extended weakness would be 1.3115, which takes GBP down to its next Fibonacci marker at 1.2830.” 

“For now, we expect buying interest to surface into the 1.3165 touchpoint, at least on its first foray (last seen last December).”