US Dollar Short-term Outlook: GBP/USD Support in View Ahead of Fed, BoE

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

• British Pound plunges more than 1.7% off monthly high- poised for fifth down day
• GBP/USD approaching multi-week uptrend support- Fed, BoE rate decisions on tap
• Resistance 1.2731, 1.2773-1.2823, 1.2906– Support 1.2661/75, 1.2624, 1.2525/43

The British Pound is poised for a fifth-consecutive daily decline with GBP/USD down for seven of the past eight sessions. A reversal off uptrend resistance is now approaching uptrend support with major event risk on tap over the next few days. These are the updated targets and invalidation levels that matter on the GBP/USD short-term technical charts ahead of this week’s Fed and BoE interest rate decisions.

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 trading just below resistance and that, “From at trading standpoint, the immediate advance may be vulnerable into the 1.27-handle – a good zone to reduce long-exposure / raise protective stops. Losses should be limited to 1.2591 IF price is heading higher on this stretch with a close above 1.2731 needed to fuel the next move.”

Sterling pulled back off resistance in the following days with price registering an intraday low at 1.26-propper into the March open before reversing sharply higher. The subsequent rally extended more than 2.3% off the monthly low with price reversing off uptrend resistance on March 8^th. The subsequent pullback is now approaching key support hurdles that IF broken, could compromise the February uptrend- the focus is on this test of support with the FOMC and BoE interest rate decision on tap over the next 48-hours.

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 extending off the January / February lows with a break below the median-line last week fueling this latest decline. Initial support rests near the weekly range lows at 1.2661/75- a region defined by the 61.8% Fibonacci retracement of the year-to-date range and the 100% extension of the most recent decline. This level is backed closely by slope support and the objective March open at 1.2625- a break / close below this threshold would be needed to invalidate the multi-week uptrend and threaten a test of the 200DMA (currently ~1.2593) and beyond.

An embedded descending channel highlights resistance at the objective yearly open at 1.2731. Key resistance and remains at 1.2773-1.2823- a region defined by the February 2019 low, the 2024 yearly opening-range highs, and the June high-day close (HDC). A breach / close above this threshold is needed to mark uptrend resumption back towards the 1.29-handle.

Bottom line: Sterling is approaching trend support ahead of major event risk into the close of the week. From a trading standpoint, a good zone to reduce short-exposure / lower protective stops – rallies would need to be limited to the yearly-open IF price is heading for a break here.

Keep in mind the Federal Reserve interest rate decision and the release of the updated economic projections is on tap today with the Bank of England on tap tomorrow- stay nimble into the releases 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

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