British Pound Technical Forecast: GBP/USD Weekly Trade Levels
- British Pound plunges nearly 4.7% off yearly high- snaps six-day losing streak post-NFPs
- GBP/USD risk for near-term gains but break of yearly uptrend threatens deeper correction- BoE on tap
- Resistance 1.3434 (key), 1.3648, 1.3749- Support 1.3092-1.3144, ~1.30 (key), 1.2903
Sterling snapped a six-day losing streak on Friday with a weak US labor report sparking a massive reversal off technical support. While further gains may be in the cards the damage may be done after GBP/USD broke the yearly uptrend. Battle lines drawn on the Sterling weekly technical chart heading into August with the Bank of England on tap.
British Pound Price Chart – GBP/USD Weekly.
Chart Prepared by Michael Boutros, Sr. Technical Strategist; GBP/USD on TradingView
Technical Outlook: In last month’s British Pound Weekly Forecast we noted that GBP/USD was, “attempting to break below the yearly uptrend and the focus is on the weekly close with respect to 1.3372/90- risk for price inflection here. From a trading standpoint, a good zone to reduce portions of short-exposure / lower protective stops- rallies should be limited to 1.3648 IF price is heading lower on this stretch..” Sterling registered an intraweek high at 1.3589 the following week before exhausting with price breaking the January uptrend this week on the heels of the Fed.
A disappointing Non-Farm Payroll report on Friday charged a rally of more than 1.1% off the lows with Friday marking an outside-daily reversal off technical support. Weekly resistance now stands with this week’s open / 2024 high at 1.3434 with subsequent objectives eyed at the yearly HWC at 1.3648. Ultimately a close above the 2022 high at 1.3749 would be needed to mark uptrend resumption.
Support rests with the 2023 high-week close (HWC) / 38.2% retracement at 1.3092/44 backed closely buy the median-line and the 52-week moving average at ~1.3000. Look for a larger reaction there with a close below needed to fuel the next leg of the decline. Subsequent support objectives rests with the 1.618% extension of the June decline at 1.2903 and the 61.8% retracement of the yearly range / February 2019 low at 1.2773/45.
Bottom line: A six-day sell-off rebounded off support on Friday with an outside-day reversal. From a trading standpoint, the immediate focus is on this recovery and IF the breakdown of the yearly uptrend is legitimate, rallies should be limited to 1.3434 with close below the yearly moving average needed to suggest a more significant reversal is underway.
Keep in mind the BoE interest rate decision is on tap Thursday with consensus estimates calling for a 25-basis point cut from the central bank. Stay nimble into the monthly opening-range and watch the weekly closes here for guidance. Review my latest British Pound Short-term Outlook for a closer look at the near-term GBP/USD technical trade levels.
GBP/USD Economic Data Releases
Economic Calendar - latest economic developments and upcoming event risk.
--- Written by Michael Boutros, Sr Technical Strategist
Follow Michael on X @MBForex
