British Pound Forecast: GBP/USD Pulls Back Ahead of November High

British Pound Outlook: GBP/USD

GBP/USD seems to be stuck in a narrow range as it pulls back ahead of the November high (1.3048), and exchange rate may consolidate over the remainder of the week as it no longer carves a series of higher highs and lows.

British Pound Forecast: GBP/USD Pulls Back Ahead of November High

Keep in mind, GBP/USD continues to hold above channel resistance after registering a fresh yearly high (1.2989) earlier this week, and the exchange rate may reestablish the rally from the start of the month should it defend the advance from the weekly low (1.2862).

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In turn, the range bound price action in GBP/USD may turn out to be temporary as the 50-Day SMA (1.2526) starts to establish a positive slope, but the Relative Strength Index (RSI) may show the bullish momentum abating as it struggles to hold in overbought territory.

With that said, a clear move below 70 in the RSI is likely to be accompanied by a larger pullback in GBP/USD like the price action from last year, but the exchange rate may stage further attempts to test the November high (1.3048) as it still holds above channel resistance.

GBP/USD Price Chart –Daily

Chart Prepared by David Song, Senior Strategist; GBP/USD on TradingView

• GBP/USD may consolidate over the remainder of the week as it no longer carves a series of higher highs and lows, but lack of momentum to hold above the 1.2900 (23.6% Fibonacci retracement) to 1.2910 (50% Fibonacci extension) area may push the exchange rate back towards 1.2820 (38.2% Fibonacci extension).
• A break/close below the 1.2710 (23.6% Fibonacci extension) to 1.2760 (61.8% Fibonacci retracement) zone may lead to a test of channel support, but GBP/USD may extend the advance from the start of the month should it continue to hold above the 1.2900 (23.6% Fibonacci retracement) to 1.2910 (50% Fibonacci extension) area.
• Need a break/close above 1.3010 (61.8% Fibonacci extension) to bring the November high (1.3048) on the radar, with the next area of interest coming in around 1.3140 (78.6% Fibonacci extension) to 1.3210 (50% Fibonacci extension).

Additional Market Outlooks

US Dollar Forecast: USD/JPY Rebound Keeps RSI Above Oversold Zone

Euro Forecast: EUR/USD on Cusp of Testing November High

Canadian Dollar Forecast: USD/CAD Faces BoC Rate Cut as Trump Tariffs Loom

Gold Price Outlook Hinges on Response to Positive Slope in 50-Day SMA

--- Written by David Song, Senior Strategist

Follow on Twitter at @DavidJSong