British Pound Forecast: GBP/USD Battle Lines Drawn at Support

British Pound Technical Forecast: GBP/USD Weekly Trade Levels

• British Pound defends key technical support near 2024 range lows
• GBP/USD April opening-range now set just above support- breakout pending
• Sterling resistance 1.2773-1.2816, 1.2906 (key), 1.3091– Support 1.2566/78, 1.2364/97, 1.2084-1.2113

The British Pound held support for a second week with GBP/USD carving the April opening-range just above the 2024 range lows. The stage is set for a breakout in the days ahead with key US inflation data on tap next week. These are the updated targets and invalidation levels that matter on the GBP/USD weekly chart.

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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 trading within a well-defined range, just below resistance at “1.2773-1.2816 with a weekly close above 1.2906 needed to mark resumption of the multi-year uptrend.” Sterling ripped higher days later with GBP/USD registering an intraweek high at 1.2893 before reversing sharply lower.

A decline of more than 2.7% off the highs takes price back into confluent support here near the yearly lows at the 38.2% retracement of the October rally and the 52-week moving average around ~1.2566/78. Looking for a reaction / possible price inflection off this zone.

Weekly resistance steady at the 1.2773-1.2816 pivot zone where the Feb 2019 low and July reversal-close converge on the 2007 trendline. Ultimately a close above the 78.6% retracement at 1.2906 is still needed fuel the next leg higher in price towards the 2023 high-week close (HWC) at 1.3091.

A break / weekly close below this key support zone would threaten a larger setback within the 2022 uptrend with key support seen at 1.2364/97- a region defined by the 61.8% Fibonacci retracement and the January 2023 high-week close (HWC). Look for a larger reaction there IF reached – ultimately, a close below would be needed to suggest a more significant high was registered last month. Subsequent support eyed at the 2023 open / low-week close (LWC) at 1.2084-1.2113.

Bottom line: Sterling has tested key technical support at the yearly lows for the past two-weeks and the focus is on a breakout of the April opening-range for guidance here. From a trading standpoint, a good zone to reduce portions of short-exposure / lower protective stops – rallies should be limited to 1.2816 IF price is heading lower with a break / close below 1.2566 needed to fuel the next leg in price. I’ll publish an updated British Pound Short-term Outlook one we get further clarity on the near-term GBP/USD technical trade levels.

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--- Written by Michael Boutros, Sr Technical Strategist with FOREX.com

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