British Pound Technical Forecast: GBP/USD Weekly Trade Levels
- GBP/USD rallied nearly 4% from the January low before stalling just below resistance near the 2022 swing high.
- Price is holding above median-line support within the November pitchfork structure, keeping the broader uptrend intact for now.
- A weekly close above resistance is required to confirm continuation, while a break below the yearly open would threaten a deeper correction.
- Resistance 1.3749 (key), 1.3900, 1.4003- Support 1.3474, 1.3339/72 (key), 1.3194
GBP/USD is consolidating just beneath a resistance zone after a strong advance from the January lows. The recent pullback has been measured, with price action stabilizing above structural support levels rather than accelerating lower. This compression beneath resistance has defined a well-formed monthly opening range, placing emphasis on how the market resolves this balance. A sustained push higher would signal trend continuation, while failure to hold nearby support would shift focus toward a broader corrective phase.. Battle lines drawn on the GBP/USD weekly technical chart.
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 approaching resistance and that, “losses should be limited to 1.3355 IF price is heading higher on this stretch with a weekly close above 1.3502 needed to fuel the next leg of the advance.” Sterling broke higher later that week with price extending more than 3.9% off the January low to register an intra-week high at 1.3870 before exhausting. GBP/USD stabilized just above the median-line of the November pitchfork and the focus is on the weekly close with respect to this slope. The monthly opening-range is now well-defined, and we are looking for a breakout to offer guidance here.
Yearly open support rests at 1.3474 and is backed closely by medium-term bullish invalidation at 1.3339/72- a region defined by the 61.8% retracement of the November rally, the 200-day moving average, the January low, and the 2024 high-week close (HWC). Note that the 25% parallel converges on this threshold over the next few weeks and a break / close below would be needed to suggest a more significant low is in place and a larger trend reversal is underway. Subsequent support rests with the 38.2% retracement of the broader 2025 advance at 1.3194.
Initial weekly resistance remains with the 2022 swing high at 1.3749 and a weekly close above this level is needed to mark uptrend resumption. Subsequent resistance objectives are eyed at the 100% extension of the November rally at 1.3900 and the 61.8% extension of the broader 2022 advance at 1.4003.
Bottom line: The Sterling rally faltered into uptrend resistance last month with the February opening-range taking shape just below the 2022 high. From a trading standpoint, losses would need to be limited to 1.3474 IF price is heading higher on this stretch with a close above 1.3749 needed to fuel the next leg of the advance.
Keep in mind we get the release of key US inflation data tomorrow with the January Consumer Price Index (CPI) on tap. Consensus estimates are calling for a slower rate of price growth to 2.5% y/y on both the headline and core read. A higher-than-expected print could limit the Fed’s scope to cut rates, especially on the heels of yesterday’s better-than-expected Non-Farm Payrolls release. Fed Fund Futures are now pricing just a 60% chance the first-rate cut will be delivered in June and a stronger CPI print could kick expectations out even further- to the benefit of the USD. Stay nimble into the release and watch the weekly close here for guidance. Review my latest British Pound Short-term Outlook for a closer look at the near-term GBP/USD technical trade levels.
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--- Written by Michael Boutros, Senior Technical Strategist
Follow Michael on X @MBForex
