British Pound Technical Forecast: GBP/USD Weekly Trade Levels
- British Pound erases weekly losses on weak NFPs– rallies more than 1.4% off the weekly low
- GBP/USD September opening-range breakout to offer guidance- Key U.S. inflation data on tap
- Resistance 1.3648/50 (key), 1.3749, 1.4003- Support 1.3280-1.3315 (key), 1.3092-1.3144, 1.2948
Sterling snapped a two-week losing streak on Friday with a weak US labor report fueling a recovery off technical support and erasing the early week-losses. The rebound keeps the focus on a breakout of the monthly opening-range which is taking shape just below technical resistance. Looking for the breakout in the days ahead and the battle lines drawn on the Sterling weekly technical chart heading into key inflation data next week.
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, “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…” GBP/USD rallied nearly 3.5% in the following weeks with price exhausting into the 75% parallel of the ascending pitchfork extending off the 2023 low. A pullback of more than 1.9% off those highs reversed course this week with the post-NFP rally snapping a two-losing streak on Friday.
Weekly resistance remains along the 75% parallel and is backed by the 2025 high-week close (HWC) / 78.6% retracement of the June decline at 1.3648/50- look for a larger reaction there IF reached with a breach / weekly close above the 2022 high at 1.3749 ultimately needed to mark resumption of the broader uptrend. Subsequent resistance objectives eyed at the upper parallel / 61.8% extension of the 2022 advance at 1.4003.
Initial weekly support rests at with the 2024 swing high at 1.3434 and is backed by 1.3280-1.3315- a region defined by the July low-week reversal close and the 61.8% retracement of the July advance. Note that the median-line converges on this threshold in the coming weeks and a break / close below this slope would suggest a more significant high is in place / a larger reversal is underway. Subsequent support objectives seen at 1.3092-1.3144 and the 100% extension at 1.2948 in the event of a break.
Bottom line: Sterling failed a third attempt to break support this week with the September opening-range taking shape just above- look for a breakout of this week’s range in the days ahead. From a trading standpoint, losses should be limited to the median-line IF price is heading higher on this stretch with a breach / close above 1.3650 needed to fuel the next leg of the advance.
Keep in mind we get the release of key US inflation data next week with Core PPI & CPI on tap Wednesday and Thursday respectively. Stay nimble into the releases and watch the weekly closes for guidance here. 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, Sr Technical Strategist
Follow Michael on X @MBForex
