British Pound Forecast: GBP/USD Breakout Looms as Bulls Defend Support

British Pound Technical Forecast: GBP/USD Weekly Trade Levels

British Pound defends uptrend support – well-defined yearly opening-range intact
GBP/USD trading into yearly-open resistance ahead of Fed Chair Powell, Non-Farm Payrolls
Sterling resistance 1.2773-1.2816, 1.2906 (key), 1.3091– Support 1.2525/46, 1.2339/97, 1.2084-1.2113

The British Pound is virtually unchanged year-to-date with GBP/USD trading back into the yearly open this week. A well-defined range remains intact and heading into March the focus is on a breakout to offer guidance with the October rally vulnerable while below key resistance at the yearly highs. These are the updated targets and invalidation levels that matter on the GBP/USD weekly chart.

Review my latest Weekly Strategy Webinar for an in-depth breakdown of this Sterling setup and more. Join live on Monday’s at 8:30am EST.

British Pound Price Chart – GBP/USD Weekly

Chart Prepared by Michael Boutros, Sr. Technical Strategist; GBP/USD on TradingView

Technical Outlook: In the January edition of my British Pound Weekly Forecast we noted that GBP/USD was, “coiled within the confines of the initial weekly range of the year / month and we’re on the lookout for a breakout in the days ahead to offer guidance. From a trading standpoint, losses should be limited to 1.2525 IF price is heading higher on this stretch with a weekly close above 1.2906 ultimately needed to fuel the next leg higher in price.”

The range broke lower the following week with price briefly registering an intraweek low at 1.2518 before rebounding. On a close basis, the January opening-range remains preserved just below confluent resistance. GBP/USD has now rallied more than 1.5% off the February low and the immediate focus is on this rally off uptrend support.

Weekly resistance unchanged at 1.2773-1.2816 with a weekly close above 1.2906 needed to mark resumption of the multi-year uptrend towards the median-line / 2023 high-week close around ~1.3091- look for a larger reaction there IF reached.

Weekly support now widens to 1.2525/46 (to include the 52-week moving average) with broader bullish invalidation steady at 1.2339/97- a pivot zone defined by the 61.8% Fibonacci retracement and the January 2023 high-week close. Note that pitchfork support converges on this zone over the next few weeks and losses below this threshold would threaten a test of key support at the 2023 yearly open / 2023 low-week close (LWC) at 1.2084-1.2113.

Bottom line: Sterling is trading back into the objective yearly open here at 1.2731 with a well-defined range intact just below resistance. We are looking for a breakout of this range in the weeks ahead. From a trading standpoint, look to reduce long-exposure / raise protective stops on a stretch towards 1.28- losses should be limited to the 25% parallel (blue) IF price is heading higher with a close above 1.2816 needed to suggest a more significant low was registered last month.

Keep in mind we still have Fed Chair Powell’s testimony before congress and US non-farm payrolls on tap this week- watch the Friday close 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 with FOREX.com

Follow Michael on X @MBForex

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