British Pound Short-term Outlook: GBP/USD Poised for Breakout

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

• British Pound marks outside-day reversal off weekly high- trading just above trend support
• GBP/USD September opening-range breakout pending- UK employment, US CPI on tap
• Resistance 1.3274 (key), 1.3413, 1.3515- Support 1.3091, 1.30, 1.2943

The British Pound surged 4.75% off the August lows before exhausting into uptrend resistance last week and the threat remains for a deeper slump within the broader multi-month advance. All eyes now shift to a breakout of the September opening-range with key event-risk on tap next week. Battle lines drawn on the GBP/USD short-term technical charts.

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: In last month’s British Pound Short-term Outlook we noted that GBP/USD was testing resistance and that losses should be limited by 1.2943 IF price is heading higher with, “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.” Sterling broke higher the following day with the rally registering an intraday high at 1.3266 last-week before exhausting. The subsequent pullback founded support this week at the 2023 high-day close (HDC) at 1.3091 and this level now defines the September opening-range low. Price is poised to mark an outside-day reversal ahead of the close on Friday and we’re looking for a break of this range for guidance.

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 nearly covering the entire weekly range on the heels of Friday’s weaker-than-expected Non-Farm Payroll (NFP) report. The focus is on a break of this range with the immediate advance vulnerable while below 1.3274.

A break / close below the median-line (blue) would threaten a larger bull-market correction with subsequent support hurdles seen at the 1.30-handle and the July 18 reversal close at 1.2943 – both areas of interest for possible downside exhaustion IF reached. Broader bullish invalidation / key support at unchanged at 1.2816/56.

A breach / daily close above the 75% parallel / August highs is needed to mark uptrend resumption with topside resistance objectives eyed at 1.3413 and the 2019swing high at 1.3515.

Bottom line: The broader April rally remains vulnerable into the start of the month with the immediate focus on a breakout of this week’s range for guidance. From a trading standpoint. Losses should be limited to 1.2943 IF price is heading higher on this stretch with a close above 1.3274 needed to fuel the next leg in price.

Keep in mind we get the release of UK employment and the first (and likely only) presidential debate on Tuesday with the US August Consumer Price Index (CPI) on tap the following day. Stay nimble until we clear this range and watch the weekly close for guidance here. 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

Economic Calendar - latest economic developments and upcoming event risk.

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

Follow Michael on X @MBForex