British Pound Short-term Outlook: GBP/USD Breakout Eyes Resistance

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

British Pound breaks September opening-range highs- poised to mark fifth daily advance
GBP/USD now approaching technical resistance- risk for exhaustion / price inflection into PCE
Resistance 1.3414 (key), 1.3515, 1.36- Support 1.3259/73, 1.32 (key), 1.3091

The British Pound is poised to mark a fifth-consecutive daily advance with GBP/USD rallying to fresh yearly highs today. A breakout of the September opening-range now takes Sterling into the first major technical consideration near uptrend resistance and the immediate advance may be vulnerable into this threshold in the days ahead. Battle lines drawn on the GBP/USD short-term technical charts.

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, “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.” Sterling plunged nearly 1.8% off the monthly highs in the following days with price registering an intraday low at 1.3002 before rebounding sharply.

A subsequent breach of the September opening-range highs has fueled a rally of more than 3% with GBP/USD now approaching initial resistance at 78.6% retracement of the 2012 decline at 1.3414- note that the 75% parallel of the yearly pitchfork (blue) rests just below this level and we’re looking for possible topside exhaustion / price inflection into this threshold over the next few days.

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 embedded ascending pitchfork with the median-line further highlighting near-term resistance here into 1.3414. The weekly opening-range is set just above initial support at the August high-day close (HDC) / 2021 low-week close (LWC) at 1.3259/73. Ultimately, a break below the median-line of the broader structure (currently near ~1.32) would be needed to suggest a more significant high is in place with such a scenario exposing subsequent support objectives at the 2023 HDC at 1.3091.

A topside breach of this key pivot zone would likely fuel another accelerated bout of gains with subsequent resistance eyed at the 2019 high at 1.3515 and the 1.36-handle. The next major technical consideration is seen just higher at 1.3671/85- a region defined by the 2022 HWC and the 1.618% extension of the October advance. Look for a larger reaction there IF reached.

Bottom line: A five-day rally is now approaching confluent resistance into the yearly uptrend. From a trading standpoint, look to reduce portions of long-exposure / raise protective stops on a stretch towards 1.34147 – losses should be limited to the median-line IF price is heading higher on this stretch with a close above this pivot zone needed to fuel the next leg.

Keep in mind we get the release of key US inflation data this week with the August Personal Consumption Expenditure (PCE) on tap Friday. Stay nimble into the release and watch the weekly close here for guidance.

Key GBP/USD Economic Data Releases

--- Written by Michael Boutros, Sr Technical Strategist

Follow Michael on X @MBForex

StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Please ensure you fully understand the risks involved by reading our full risk warning.

FOREX.com is a trading name of StoneX Europe Limited, and FOREX.com/ie is a domain operated by StoneX Europe Ltd, a member of StoneX Group Inc. StoneX Europe Ltd, is a Cyprus Investment Firm (CIF) company registered to the Department of Registrar of Companies and Official Receiver with a Registration Number HE409708, and authorized and regulated by the Cyprus Securities & Exchange Commission (CySEC) under license number 400/21. StoneX Europe is a Member of the Investor Compensation Fund (ICF) and has its registered address at Nikokreontos 2, 5th Floor, 1066 Nicosia, Cyprus.

StoneX Europe Limited is registered with the German Federal Financial Supervisory Authority (BaFin). BaFin registration ID: 10160255

FOREX.com is a trademark of StoneX Europe Ltd, a member of StoneX Group Inc.

The statistical data and the awards received refer to the Global FOREX.com brand.

This website uses cookies to provide you with the very best experience and to know you better. By visiting our website with your browser set to allow cookies, you consent to our use of cookies as described in our Privacy Policy.

Through passporting, StoneX Europe is allowed to provide its services and products on a cross-border basis to the following European Economic Area ("EEA") states: Austria, Bulgaria, Croatia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden.

Additionally, StoneX Europe Ltd is allowed to provide Investment and Ancillary Services to the following non-EU jurisdiction: Switzerland.

StoneX Europe Ltd products, services and information are not intended for residents other than the ones stated above.

Tied Agent Information: KQ Markets Europe Ltd with Company No. HE427857.
Address: Athalassas 62, Mezzanine, Strovolos, Nicosia Cyprus.
Services Provided: Reception and Transmission of Orders.
Commencement Date: 06/12/2022
Website: KQ Markets - CFD Trading | KQ Markets

We may pay inducements, such as commissions or fees, to affiliates or third-party introducers for referring clients to us. This is in line with regulatory guidelines and fully disclosed where applicable.

StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation. StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.