British Pound Technical Outlook: GBP/USD Short-Term Trade Levels
- British Pound rally falters at uptrend resistance- Sterling poised for second consecutive weekly decline
- GBP/USD weekly opening-range breakout to offer guidance– key US / UK inflation data on tap
- Resistance 1.3645, 1.3749 (key), 1.3816- Support 1.3530, 1.3388-1.3415 (key), 1.3176
The British Pound is poised to mark a fifth consecutive daily decline after registering fresh multi-year highs into the monthly open. The reversal threatens a larger Sterling correction with weekly opening-range preserved just above support on Thursday. Battle lines drawn on the GBP/USD short-term technical charts.
British Pound Price Chart – GBP/USD Daily
Chart Prepared by Michael Boutros, Sr. Technical Strategist; GBP/USD on TradingView
Technical Outlook: In last month’s GBP/USD Short-term Outlook, we noted that GBP/USD was, “testing resistance at the monthly range highs today and the focus in on the daily close with respect to 1.3617. From a trading standpoint, losses should be limited to the median-line IF Sterling is heading higher on this stretch with a breakout of the monthly opening-range needed to fuel the next leg of the advance.” Sterling broke higher the following day with price surging more than 3.1% to levels not seen since November of 2021. The rally failed to close above confluent trend resistance at the 2022 high near 1.3749 with GBP/USD now off more than 1.8% from the monthly / yearly high. The July opening-range seems set here at 1.3530-1.3750 and the focus is on a breakout in the days ahead with the broader outlook still constructive while within this formation.
British Pound Price Chart – GBP/USD 240min
Chart Prepared by Michael Boutros, Sr. Technical Strategist; GBP/USD on TradingView
Notes: A closer look at Sterling price action shows GBP/USD testing support today at the 61.8% retracement of the late-June advance at 1.3530 with the weekly opening-range preserved just above. Initial resistance eyed along this short-term channel with breach above the objective weekly open at 1.3645 needed to shift the focus back towards the 2022 high at 1.3749- a daily close above this level is still needed to mark uptrend resumption. Subsequent resistance objective eyed at the 100% extension of the January advance at 1.3816 and the 61.8% extension of the broader 2022 advance at 1.4003.
A break lower exposes key support at the 61.8% retracement of the May rally / 2024 high-day close (HDC) at 1.3388-1.3415. A break / close below this slope would suggest a more significant high was registered last week / a larger reversal is underway with initial support seen at the May low-day close (LDC) at 1.3176.
Bottom line: A reversal from trend resistance threatens a larger correction within the broader GBP/USD uptrend. The immediate focus is on a breakout of the weekly opening-range for guidance. From a trading standpoint, losses would need to be limited to 1.3388 IF Sterling is heading higher on this stretch with a close above 1.3749 ultimately needed to mark uptrend resumption.
Keep in mind we get the release of key inflation data from the US & UK next week with the June Consumer Price Index (CPI) on tap Tuesday and Wednesday respectively. Stay nimble into the releases and watch the weekly closes here for guidance. Review my latest British Pound Weekly Forecast for a closer look at the longer-term GBP/USD technical trade levels.
Key GBP/USD Economic Data Releases
--- Written by Michael Boutros, Sr Technical Strategist with FOREX.com
Follow Michael on X @MBForex
