British Pound Forecast: GBP/USD Bulls Halted at Resistance

British Pound Technical Forecast: GBP/USD Weekly Trade Levels

British Pound rally capped by resistance for fourth-consecutive week
GBP/USD monthly opening-range taking shape- breakout to offer guidance
Sterling resistance 1.2773-1.2816, 1.2906 (key), 1.3091– Support 1.2525, 1.2453, 1.2339/97

The British Pound is attempting to mark a fourth consecutive weekly-advance but remains capped by a key technical confluence we have been tracking for months now. The January opening-range is taking shape just below and the immediate focus is on a possible breakout in the days ahead for guidance. It is make-or-break for the bulls here at resistance. 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 highlighted that the GBP/USD rally had extended into technical resistance and to be, “on the lookout for a possible exhaustion low ahead of 1.23 IF Sterling is still heading higher here with a close above 1.2773 needed to fuel the next leg in price.” GBP/USD registered a low at 1.25 that week before rebounding with Sterling holding just below confluent resistance for nearly four-weeks.

The focus into the start of the month / year remains on this key pivot zone with the region of interest now shifting slightly to include the February 2019 swing low and the July weekly-reversal close at 1.2773-1.2816. Ultimately, a breach / weekly close above the 78.6% retracement at 1.2906 is needed to mark uptrend resumption towards the 2023 high-week close (HWC) at 1.3091 and beyond.

Initial weekly support rests with the 38.2% retracement of the October rally at 1.2525 and is backed closely by the 52-week moving average (currently ~1.2453). Key support / bullish invalidation now raised to the 61.8% Fibonacci retracement / January high-week close at 1.2339/97 – a close below this threshold would be needed to suggest a larger technical reversal is underway.

Bottom line: Sterling has held confluent resistance for over a month with the January opening-range taking shape just below. From at 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. Stay nimble into the January opening-range- look to the breakout of this week’s range to offer guidance here in the days ahead. I’ll publish an updated British Pound Short-term Outlook once 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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