GBPUSD (1.2861): The British pound extended the declines down to 1.2808 level of support on Tuesday. The declines came on a weaker construction PMI report. In the near term, we expect to see a retest of the support level. We expect this support to hold and a rebound off the support could trigger a potential head and shoulders pattern. The upside target is seen from Friday’s close of 1.2959. The formation of the head and shoulders pattern brings the expectation of a downside decline. GBPUSD could likely fall to 1.2671 on a successful head and shoulders formation.
