British Pound Short-term Outlook: GBP/USD Bulls Slow Near Resistance

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

• British Pound attempting 6 consecutive daily advance- rallies 3.67% off monthly low
• GBP/USD bulls now approaching major pivot zone at 2023 high- risk for price inflection
• Resistance 1.3142/56 (key), 1.3273, 1.3413- Support 1.30, 1.2943, 1.2816/55 (key)

The British Pound ripped to fresh yearly highs this week with a five-day rally in GBP/USD now approaching a major technical confluence at the 2023 highs- risk for topside exhaustion / price inflection in the days ahead. Battle lines drawn on the Sterling short-term technical charts.

Review my latest Weekly Strategy Webinar for an in-depth breakdown of this GBP/USD 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: In my last British Pound Short-term Outlook we noted that a, “V-shaped recovery off the lows now takes GBP/USD back into a key pivot-zone at 1.2810/57- a region defined by the 38.2% retracement of the July decline, the July weekly reversal close, the objective August open, and the March high-day close (HDC).”  We specifically cited that, “losses would need to be limited to the yearly open IF price is heading higher on this stretch with a close above 1.2857 needed to suggest a more significant low is in place.”

Sterling ripped through resistance three-days later with GBP/USD now attempting to mark a sixth-consecutive daily advance. The rally is approaching a major technical confluence today at the 2023 high / 100% extension of the October advance at 1.3142/56- risk for possible topside exhaustion / price inflection into this threshold in the days ahead.

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 trading within the confines of an ascending pitchfork formation (blue) extending off the monthly low with the 75% parallel further highlighting immediate resistance here at 1.3142/56. Look for initial support along the median-line (currently ~1.3075) backed by the 1.30-handle and the July 18^th reversal close at 1.2943. Broader bullish invalidation now set to 1.2816/56.

A topside breach / close above this pivot zone is needed to mark uptrend resumption with subsequent resistance objectives eyed at the 2021 low-week close (LWC) at 1.3274 and the 78.6% Fibonacci retracement of the broader 2021 decline at 1.3413.

Bottom line: The British Pound rally is approaching a major technical pivot zone just higher and while the broader outlook remains constructive, the immediate advance may be vulnerable here near-term. From a trading standpoint, a good zone to reduce portions of long-exposure / raise protective stops – losses should be limited by 1.2943 IF price is heading higher on this stretch with a close above 1.3156 needed to fuel the next leg higher.

Keep in mind we get remarks from both Fed Chair Powell and BoE Governor Bailey at the Jackson Hole Economic Symposium tomorrow- stay nimble into the event and watch the weekly close here for guidance. Review my latest British Pound Weekly Forecast for a closer look at the longer-term GBP/USD trade levels.

Key GBP/USD Economic Data Releases

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

Follow Michael on X @MBForex