British Pound Technical Forecast: GBP/USD Bearish Outside Week

British Pound Technical Forecast: GBP/USD Weekly Trade Levels

• British Pound breaks August opening-range / uptrend support
• GBP/USD vulnerable to further losses below this week’s high
• Sterling resistance 1.2757/77, 1.30, 1.3103– Support 1.2315/97 (key), ~1.2172, 1.2084

The British Pound plunged more than 4.5% off the yearly highs against the US Dollar with GBP/USD poised to mark a bearish engulfing weekly candle for a fourth consecutive-weekly decline. A break below multi-month uptrend support now threatens further losses heading into September. These are the updated targets and invalidation levels that matter on the GBP/USD weekly technical 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 noted highlighted a reversal off confluent uptrend resistance and questioned, “is a more significant medium-term high in place?” The focus was on medium-term bullish invalidation at, “the 38.2% retracement of the 2022 advance which converges on channel support near 1.2630.” Price held this level for over three-weeks before finally breaking yesterday with a daily close below validating a breakout of the August opening-range.

The move threatens a plunge towards the confluent support at 1.2315/97- a region defined by the 61.8% Fibonacci retracement of the yearly range, the May low-week close and the January high-week close. Look for a larger reaction there IF reached- subsequent support objectives rest lower at the 52-week moving average (currently ~1.2172) and the objective yearly open at 1.2084.

Weekly resistance remains steady at 1.2757/73 and we’ll now reserve this threshold as our near-term bearish invalidation level. A breach / close above this pivot zone is needed to alleviate further downside pressure with subsequent resistance eye back at the 1.30-handle and 1.3103 (still key).

Bottom line: Sterling has broken the August opening-range lows / uptrend support and threatens further losses in the weeks ahead. That said, the decline is poised to mark a fourth consecutive week with US Core PCE and Non-Farm Payrolls on tap into the September open. From a trading standpoint, rallies should be limited to this week’s high IF price is heading lower on this stretch – look to reduce short-exposure / lower protective stops on a stretch towards 1.24. Review my latest British Pound Short-term Outlook for a closer look at 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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