British Pound Technical Forecast: GBP/USD Support Sits at Yearly Open

British Pound Technical Forecast: GBP/USD Weekly Trade Levels

• British Pound plunges nine of the past eleven weeks- risk for downside exhaustion
• GBP/USD now approaching downtrend support into the 2023 yearly open
• Sterling resistance 1.2277, 1.2315, 1.2397– Support 1.2084-1.2113, 1.1841, 1.1632

The British Pound plummeted more than 7.4% off the yearly highs verse the US Dollar with GBP/USD now within striking distance of confluent support into the objective 2023 yearly open. These are the updated targets and invalidation levels that matter on the GBP/USD weekly technical chart into the close of September.

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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 that GBP/USD had, “broken the August opening-range lows / uptrend support and threatens further losses in the weeks ahead.” The focus was on possible inflection into 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.

The post-FOMC breakdown is now attempting a fourth consecutive weekly decline with GBP/USD pivoting back below the 52-week moving average for the first time since March. The decline takes Sterling within striking distance of key support at 1.2084-1.2113- a region defined by the objective yearly open and 2023 low-week close. Look for a larger reaction there IF reached with a close below needed to fuel the next leg lower in price towards the January lows at 1.1841. Initial weekly resistance now eyed at the 52WMA at ~1.2277 backed closely by 1.2314. Medium-term bearish invalidation now lowered to 1.2397.

Bottom line: The British Pound freefall is approaching a key technical confluence into channel support. From a trading standpoint, look to reduce short-exposure / lower protective stops on a stretch towards 1.21- rallies should be limited to 1.2397 IF price is heading lower with a break below channel support needed to mark resumption of the July downtrend. Keep in mind we have UK GDP and US core inflation data on tap into the close of the week / month / quarter – stay nimble here and watch the close on Friday. 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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