British Pound Short-term Outlook: GBP/USD Bulls Emerge

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

British Pound marks false break at downtrend support- threatens larger correction
GBP/USD approaching initial trend resistance- weekly opening-range breakout imminent
Resistance 1.2731/73, 1.2820s, 1.2849/80 (key)- Support 1.2571-1.2613 (key), 1.2487, 1.2423

The British Pound rallied more than 2.1% off the November low with GBP/USD now approaching initial resistance into the September downtrend. The weekly opening-range is set heading into tomorrow’s US non-farm payroll report and the focus is on a potential breakout in the days ahead. 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 technical 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, “approaching a major support pivot and while a break of the monthly opening-range keeps the focus lower, the immediate decline may be vulnerable into this zone. From at trading standpoint, look to reduce short-exposure / lower protective stops on a stretch towards the 1.26-handle.” Sterling briefly broke below support to register an intraday low at 1.2487 before rebounding more than 2.1% into the close of the month.

The advance has been testing resistance for the past two weeks at 1.2731/73- a region defined by the objective yearly open, the 61.8% retracement of the yearly range, and the February 2019 swing low. Note that the median-line converges on this threshold over the next few days and a breach / close above is needed to threaten a larger correction. Looking for possible price infection here.

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 testing resistance ahead of the US open at the weekly open / weekly opening-range highs. A topside breach here would expose the 200-day moving average (currently ~1.2820) and a more significant technical confluence at 1.2849/80- a region defined by the 38.2% retracement of the September decline, the March high-day close (HDC), and the 100% extension of the recent advance. Look for a lager reaction there IF reached with breach / close above needed to suggest a more significant low was registered last month / a larger trend reversal is underway.

Key support remains unchanged at the 61.8% retracement of the 2023 October rally /June & July lows at 1.2571-1.2613- a break below this threshold would be needed to mark downtrend resumption towards subsequent support objectives at 1.2487 and the 2022 December HDC at 1.2423 (an area of interest for possible downside exhaustion / price inflection IF reached).

Bottom line: A false break of downtrend resistance is threatening a larger recovery in GBP/USD. For now, the immediate focus is on a breakout of the weekly opening-range for guidance with the broader September downtrend vulnerable while above 1.2571. From a trading standpoint, rallies would need to be limited to 1.2880 for the multi-month downtrend to remain viable.

Keep in mind US non-farm payrolls are on tap tomorrow with the monthly opening-range now taking shape just above support. Stay nimble into the release a watch the weekly closes here for guidance. Review my latest British Pound Weekly Forecast for a closer look at the longer-term GBP/USD technical trade levels.

Key GBP/USD Economic Data Releases

Active Short-term Technical Charts

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

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.