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.

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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.

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

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