British Pound Short-Term Outlook: GBP/USD Breakout Imminent

British Pound Technical Outlook: GBP/USD Short-Term Trade Levels

• British Pound reversal off uptrend resistance now testing uptrend support
• GBP/USD opening-range takes shape just above – breakout imminent
• Sterling resistance 1.2823/35, 1.2943, 1.30- support 1.2630/53 (key), 1.2530s, 1.2446

The British Pound is poised for a breakout as GBP/USD carves the August opening-range just above multi-month trend support. The battle lines are drawn heading into the close of the week. These are the updated targets and invalidation levels that matter on the GBP/USD short-term technical.

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 Daily

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

Technical Outlook: The British Pound rally faltered into uptrend resistance last month at the median-line of this ascending pitchfork formation extending off the 2022 / 2023 lows. A decline of more than nearly 4% off the highs takes GBP/USD into uptrend support with the August opening-range now taking shape just above. The immediate focus is on a breakout of the 1.2630-1.2835 range for guidance here- watch the weekly close.

British Pound Price Chart – GBP/USD 240min

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

Notes: A closer look at Sterling price action shows GBP/USD carving the monthly opening-range just below near-term resistance at 1.2823/35- a region defined by the June high-day close and the objective monthly open. Note that basic channel resistance off the July high also converges on this threshold and further highlights its technical significance.

Initial support rests at 1.2630/53- a region defined by 38.2% retracement of the yearly range and the 100% extension of the decline July decline. A break / close below this threshold would be needed to validate a breakout of the monthly opening range and threaten a larger correction towards channel support (currently ~1.2530s) and the December / January highs at 1.2446/48- look for a larger reaction there IF reached.

A topside breach / close above the monthly opening-range would threaten a recovery towards the 61.8% Fibonacci retracement of the July decline at 1.2943. Rallies should be limited to 1.30-handle IF price is heading lower on this stretch.  

Bottom line: Sterling is carving out a well-defined monthly opening-range just above multi-month uptrend support – a breakout is imminent in the days ahead. From a trading standpoint, the threat does remain tilted to the downside while within this range with a breakout to ultimately offer further conviction on the medium-term directional bias. Review my latest British Pound Weekly Forecast for a closer look at the longer-term GBP/USD trade levels.

UK / US Economic Data Releases

Economic Calendar - latest economic developments and upcoming event risk.

Active Short-term Technical Charts

• Euro Short-term Outlook: EUR/USD Poised for August Breakout
• Canadian Dollar Short-term Outlook: USD/CAD Set to Snap 2023
• Gold Short-term Outlook: XAU/USD Bulls Feel the Heat- Support In View
• Crude Oil Short-term Outlook: WTI Bulls Snap 2023 Losses
• US Dollar Short-term Outlook: Fed Countdown- USD Battle Lines Drawn

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

Follow Michael on Twitter @MBForex